Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVSION
G.R. No. L-26551 February 27, 1976
THE
PEOPLE
OF
THE
PHILIPPINES, plaintiff-appellant,
vs.
WENCESLAO
ALMUETE
FERNANDO FRONDA, FAUSTO
DURION and CIPRIANO FRONDA,
defendants-appellees.
Solicitor General Antonio P. Barredo,
Assistant Solicitor General Antonio G.
Ibarra and Solicitor Vicente A. Torres
for appellant.
Emiliano D. Castellanes for appellees.

the information on that grounds (1) that it

does not allege facts sufficient to
constitute the crime charged; (2) that there
is no law punishing it, and (3) that the
court has, no jurisdiction over the alleged
time The fiscal opposed the motion.
The lower court granted the motion and
dismissed the information in its order of
August 11, 1966. It held that the
information is basically deficient because
it does not describe t lie circumstances
under which the cavans of palay were
found in the possession of the accused
tenants; it does not specify the date agreed
upon for the threshing of the harvests, and
it does not allege that the palay found in
the tenants' possession exceeded ten
percent of their net share based on the last
normal harvest.

AQUINO, J.:
Wenceslao Almuete Fernando Fronda,
Cipriano Fronda and Fausto Durion were
charged with a violation of section 39 of
the Agricultural Tenancy Law. It was
alleged in the information that in
December, 1963, in Muoz, Nueva Ecija
the accused being tenants of Margarita
Fernando in her riceland, without notice to
her or without her consent, pre-threshed a
portion of their respective harvests of five
(5) cavans of palay each to her damage in
the amount of P187.50 at P12.50 a cavan
(Criminal Case No. SD-179, Court of First
Instance of Nueva Ecija, Sto. Domingo
Branch VI).
Upon arraignment the accused pleaded not
guilty. They filed motion for a bill of
particulars as to the exact date of the
commission of the offense charged. The
lower court denied their motion because
they had already entered their plea.
Thereafter, they -filed a motion to quash

The prosecution appealed from the order

of dismissal. The Solicitor General argues
in his brief that the information in this
case alleges all the elements of the offense
defined in section 39 of Republic Act No.
1199, as amended of Republic Act No.
2263. Sections 39 and 57 of the same law
reads as follows:
SEC. 39. Prohibition on Pre-threshing.
It shall be unlawful for either the tenant or
landholder, without mutual consent, to
reap or thresh a portion of the crop at any
time previous to the date set for its
threshing- That if the tenant n food for his
family and the landholder does not or
cannot furnish such and refuses to allow
the tenant to reap or thresh a portion of the
crop previous to the date set for its
threshing, the tenant can reap or thresh not
more than ten percent of his net share in
the last normal harvest after giving notice
thereof to the landholder or his
representative. Any violation of this
situation by either party shall be treated

and penalized in accordance with this Act

and/or under the general provisions of law
applicable to that act committed.
SEC. 57. Penal Provision. Violation of
the provisions of ... sections thirty-nine
and forty-nine of this Act shall be
punished by a fine not exceeding two
thousand pesos or imprisonment not
exceeding one year, or both, in the
discretion of the Court. ... *
We hold that the order of dismissal should
be affirmed because as held in People vs.
Adillo, L-23M, November 27, 1975, a
case similar to the instant case, section 99
was impliedly repealed by the Agricultural
Land Reform Code of 1963, as amended
by Republic Act No. 6389 168 O.G. 915)
and as implemented by Presidential
Decrees Nos. 2, 27 and 316. That Code
was already in force when the act
complained of was committed. The repeal
may be rationalized in this manner:
The prohibition against pre-reaping or
pre-threshing found in section 39 of the
Agricultural Tenancy Law of 1954 is
premised on the existence of the rice share
tenancy system. The evident purpose is to
prevent the tenant and the landholder from
defrauding each other in the division of
the harvests.
The Agricultural Land Reform Code
superseded the Agricultural Tenancy Law
(except as qualified in sections 4 and 35 of
the Code). The Code instituted the
leasehold system and abolished share
tenancy subject to certain conditions
indicated in section 4 thereof. It is
significant that section 39 is not
reproduced in the Agricultural Land
Reform Code whose section 172 repeals
"all laws or part of any law inconsistent
with" its provisions.

Under the leasehold system the

prohibition against pre-threshing has no,
more raison d'etre because the lessee is
obligated to pay a fixed rental as
prescribed in section 34 of the
Agricultural Land Reform Code, or the
Code
of
Agrarian
Reforms,
as
redesignated in Republic Act No. 6389
which took effect on September 10, 1971.
Thus, the legal maxim, cessante ratione
legis, cessat ipsa lex (the reason for the
law ceasing, the law itself also ceases).
applies to this case.
Section 4 of the Code of Agrarian
Reforms declared agricultural share
tenancy throughout the country as
contrary
to
public
policy
and
automatically converted it to agricultural
leasehold. Presidential Decree No. 2
proclaimed the entire country "as a land
reform area". Presidential Decree No. 27
emancipated the tenant from the bondage
of the soil. And Presidential Decree No.
316 interdicted the ejectment or removal
of the tenant-farmer from his farmholding
until the promulgation of the rules and
regulations implementing Presidential
Decree No. 27. (See People vs. Adillo,
supra).
The legislative intent not to punish
anymore the tenant's act of pre- reaping
and pre-threshing without notice to the
landlord is inferable from the fact that, as
already noted, the Code of Agrarian
Reforms did not reenact section 39 of the
Agricultural Tenancy Law and that it
abolished share tenancy which is the basis
for penalizing clandestine pre-reaping and
pre-threshing.
All indications point to a deliberate and
manifest legislative design to replace the
Agricultural Tenancy Law with the Code
of Agrarian Reforms, formerly the

Agricultural Land Reform Code, at least

as far as ricelands are concerned.

WHEREFORE, the order of dismissal is

affirmed with costs de oficio.

As held in the Adillo case, the act of prereaping and pre-threshing without notice
to the landlord, which is an offense under
the Agricultural Tenancy Law, had ceased
to be an offense under the subsequent law,
the Code of Agrarian Reforms. To
prosecute it as an offense when the Code
of Agrarian Reforms is already in force
would be repugnant or abhorrent to the
policy and spirit of that Code and would
subvert the manifest legislative intent not
to punish anymore pre-reaping and prethreshing without notice to landholder.
It is a rule of legal hermeneutics that "an
act which purports to set out in full all that
it intends to contain operates as a repeal of
anything omitted which was contain in the
old act and not included in the amendatory
act" (Crawford, Construction of Statutes,
p. 621 cited in the Adillo case).

SO ORDERED.
Footnotes
* Appellees' contention that the Court of
First Instance had no jurisdiction over the
offense because inferior courts have
jurisdiction over offense in which the
penalty is imprisonment for not more than
three years, or a fine of not more three
thousand pesos, or both such fine and
imprisonment and that it is the Muoz
municipal court that has jurisdiction is
wrong. The Court of First Instance has
concurrent jurisdiction with the inferior
court in mm in which the penalty provided
by law is imprisonment for more than six
months, or a fine of-more than two
hundred pesos (Sec. 44[f], Judiciary Law).

A subsequent statute, revising the whole

subject matter of a former statute, and
evidently intended as a substitute for it,
operates to repeal the former statute" (82
C.J.S. 499). 'The revising statute is in
effect a 'legislative declaration that
whatever is embraced in the new statute
shall prevail, and whatever is excluded
therefrom shall be discarded" (82 C.J.S.
500).
The repeal of appeal law deprives the
courts of jurisdiction to punish persons
charged with a violation of the old penal
law prior to its repeal (People vs. Tamayo,
61 Phil. 225; People vs. Sindiong and
Pastor, 77 Phil. 1000; People vs. Binuya,
61 Phil. 208; U.S. vs. Reyes, 10 Phil. 423;
U.S. vs. Academia, 10 Phil. 431. See
dissent in Lagrimas vs. Director of
Prisons, 57 Phil. 247, 252, 254).

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-23309
October 31,
1968
NATIONAL POWER
CORPORATION, petitioner,
vs.

HON. FRANCISCO ARCA, Judge of

the Court of First Instance of Manila,
PHILIPPINE POWER &
DEVELOPMENT COMPANY and
DAGUPAN ELECTRIC
CORPORATION, ETC., respondents.
Tomas P. Matic, Jr. and Felipe S. Aldana
for petitioner.
Paredes, Poblador, Cruz & Nazareno and
Leonardo Abola for respondents.
REYES, J.B.L., J.:
Original petition for certiorari filed by the
National Power Corporation directed
against the orders of the Court of First
Instance of Manila, denying its motions to
dismiss and to dissolve the writ of
preliminary injunction issued in Civil
Case No. 55824 of said court.
On 26 December 1963, the Philippine
Power and Development Company1 and
the Dagupan Electric Corporation,2in their
own behalf and on that of all the electric
plant operators, who are members of the
Philippine
Electric
Plant
Owners'
Association (PEPOA), filed an injunction
suit in the Court of First Instance of
Manila (Civil Case No. 55824) to restrain
enforcement by the National Power
Corporation of a revised rate of charges
for the electric power and energy sold by
said defendant, which schedule of new
rates would take effect 1 January 1964.
The Petition alleged, inter alia, that the
disputed revised rates, which would
increase the cost of electric power and
energy being purchased from defendant by
plaintiff
Philippine
Power
and
Development Company by 24% and that
purchased by plaintiff Dagupan Electric
Corporation by 30 %, are unreasonable,
excessive and unnecessary; that the said
revised rates had not been previously

approved by the Public Service

Commission; and that the unilateral
revision by the defendant of the rate and
its imposition upon the plaintiffs of the
amended contracts embodying said new
rates, without first submitting them to
arbitration, was in gross violation of the
provisions of the current contracts
between them. Plaintiffs thus prayed the
court for a temporary restraining order to
prevent the scheduled enforcement and
implementation of the revised rates and
amended contracts; that, after hearing,
said injunction be made permanent; and
that they be awarded attorney's fees and
costs.
Finding sufficient reasons therefor, the
court issued, on 27 December 1963, the
writ of preliminary injunction prayed for
by the plaintiffs, upon their filing a bond
for P5,000.00.
Defendant thereupon moved to dissolve
the injunction, claiming that the
enforcement of the new rate schedule will
not violate any right of the plaintiffs; that
it will not cause them irreparable damage
or injury; that there are other legal
remedies available to the plaintiffs; and
that the court has no jurisdiction to pass
upon the reasonableness or necessity of
the revised rates, the authority therefor
allegedly belonging to the Public Service
Commission. A motion to dismiss the
petition was also filed, based on the same
ground of lack of jurisdiction by the court.
Upon denial of this motion on 5 February
1964, defendant filed its answer with
counterclaims, traversing the allegations
of the petition and raising, as one of the
special defenses, the issue of the court's
jurisdiction over the subject matter of the
action.
By order of 4 March 1964, the court

denied defendant's motion to dissolve the

injunction; and when its motion for
reconsideration of the aforesaid order was
also denied on 10 June 1964, defendant
National Power Corporation filed the
present petition, charging the respondent
judge with grave abuse of discretion in not
dismissing the case and in not dissolving
the temporary restraining order issued
therein.
In this proceeding, petitioner does not
deny that the lower court can take
cognizance of some of the issues raised by
the parties in their pleadings. It is
petitioner's theory, however, that for a
court to acquire jurisdictionover a case, it
is not enough that it should have
jurisdiction "over a portion of the subject
matter of the complaint," but upon all the
issues brought up by the pleadings. And
since, according to petitioner, the court
below
cannot
determine
the
reasonableness of the disputed revised
rates, which is one of the issues raised in
the petition,because the matter allegedly
pertains to the Public Service Commission
pursuant to Republic Act 2677, it is
contended that the respondent judge
committed grave abuse of discretion in
refusing to dismiss the case and todissolve
the writ of preliminary injunction
involved in this controversy.
The contention is devoid of merit.
In the first place, contrary to petitioner's
assertion, the authority to inquire into the
rates of charges for services rendered by
the National Power Service Commission
does not devolve upon the Public Service
Commission. Commonwealth Act No.
120, creating the National Power
Corporation, specifically provides:
SEC. 2. The powers, functions, rights and

activities of the said corporationshall be

the following:
xxx

xxx

xxx

(g) ... to sell electric power and to fix the

rates and provide for the collection of the
charges for any service rendered:
Provided, That the rates of charges shall
not be subject to revision by the Public
Service Commission. (Emphasis supplied)
It is true that under Sections 13 and 14 of
Republic Act 2677,3 amending the Public
Service Act and approved on 18 June
1960, the Public Service Commission was
vested with jurisdiction to fix the rate of
charges by public utilities owned or
operated by any instrumentality of the
National Government or by any
government-owned
or
controlled
corporation. But the enactment of this
later legislation, which is a general law,
cannot be construed to have repealed or
withdrawn the exempting proviso of
Section 2, paragraph (g), of the earlier
Commonwealth Act No. 120 abovequoted.
For it is now the settled rule in this
jurisdiction that "a special statute,
providing for a particular case or class of
cases, is not repealed by a subsequent
statute, general in its terms, provisions and
applications, unless the intent to repeal or
alter is manifest, although the terms of the
general law are broad enough to include
the cases embraced in the special law"
(Manila Railroad Co. vs. Rafferty, 40 Phil.
225).
In the present case, there appears no such
legislative intent to repeal or abrogate the
provisions of the earlier special law. From
the explanatory note to House Bill No.
4030, that later became Republic Act No.
2677, it was explicit that the jurisdiction
conferred upon the Public Service

Commission over the public utilities

operated by government-owned or
controlled corporations is to be confined
to the fixing of rates of such public
services, "in order to avoid cutthroat or
ruinous
and
unfair
competition
detrimental to operators and to the public
interests."4 By the nature of the service
being rendered by the National Power
Corporation, i.e., the harnessing and then
distribution and sale of electric power and
energy to electric plant owners who, in
turn, resell them to the consuming public,
the contingency intended to be met by the
legal provision under consideration would
not exist. No other conclusion appears
possible, therefore, than that the authority
of the Public Service Commission under
Republic Act 2677, over the fixing of rates
of charges of public utilities owned or
operated by government-owned or
controlled corporations, can only be
exercised where the charter of the
government corporation concerned does
not contain any provision to the contrary.
Where there are two statutes, the earlier
special and the later general the terms
of the general broad enough to include the
matter provided for in the special the
fact that one is special and the other is
general creates a presumption that the
special is to be considered as remaining an
exception to the general: one as a general
law of the land, the other as the law of a
particular
case.
(Manila
Railroad
Company vs. Rafferty, 40 Phil. 225, 228;
City of Manila vs. Public Service
Commission, 52 Phil. 515)
But even if it were held that sections 13(a)
and 14 of the Public Service Law, as
amended by Republic Act 2677, have
overridden and impliedly repealed the
incompatible proviso of section 2(g) of the
National Power Corporation charter, and

that the Public Service Commission had

jurisdiction to fix its rates, the position of
this petitioner would not improve. For it is
nowhere denied that the new schedule of
rates that the National Power Corporation
was attempting to impose had not been
previously authorized by the Public
Service
Commission,
hence,
the
respondents power companies were
justified in contesting such new rates as
illegal. In doing so, they were entitled to
apply to respondent court of first instance
for injunctive relief against the wrongful
attempt of petitioner to enforce such
unauthorized rates, since that remedy is
not obtainable from the Public Service
Commission itself (Commonwealth Act
146, section 22; Ramos vs. Court of First
Instance of Tayabas, 58 Phil. 374, 376).
Injunction is an exercise of judicial power,
while the Public Service Commission is
but an administrative body with limited
functions.5
Thus, whether or not the Public Service
Commission had authority to pass upon
the petitioner's revised rates, it is
undeniable that respondents companies
had the right to resort to the respondent
court of first instance in quest of
injunctive relief against their enforcement
which were claimed to be unauthorized by
law and violative of respondents'
contracts; and it equally lay within the
lower court's jurisdiction to entertain their
action. The grant of the injunction
complained of was merely incidental to
the authority of the court to take
cognizance of and adjudicate the main
controversy submitted to it.
Neither does the petitioner make out a
case of abuse of discretion. Its side of the
question was given due consideration,
through its motion to lift the preliminary
injunction issued. Whatever error may
have been committed in denying that
motion would be at most an error of

judgment, not correctible by prerogative

writ but by seasonable appeal. The
argument that private respondents should
have first exhausted administrative
remedies by appeal to the National
Economic Council and the President is
without merit, for the petitioner itself
claimed that the revised rates had been
already approved by said Council;
furthermore, neither that body nor the
President could adjudicate whether or not
there was a violation of the contracts
between petitioner and the private
respondents, as the latter averred.
As to the claim that the damages to be
suffered by private respondents are not
irreparable, we believe that the same is
untenable, for the losses to be suffered by
the said respondents would necessarily
reduce their resources and efficiency and
prejudicially involve the services rendered
by them to the general public, to an extent
that can not be determined in advance.
WHEREFORE, the petition for a writ of
certiorari is denied, and the preliminary
injunction heretofore issued is dissolved.
Costs against petitioner National Power
Corporation.

Owner and operator of the electric plant

supplying electric light and power in
Dagupan City.
3
"SEC. 13. (a) The Commission shall
have jurisdiction, supervision, and control
over all public services and their
franchises,
equipment,
and
other
properties, and in the exercise of its
authority, it shall have the necessary
powers and the aid of public force:
Provided, That public services owned or
operated by government entities or
government-owned
or
controlled
corporations shall be regulated by the
Commission in the same way as privatelyowned public services, but certificates of
public convenience and necessity shall not
be required of such entities or
corporations; ..."
"SEC. 14. The following are exempted
from the provisions of the preceding
section:
xxx
xxx
xxx
"(e) Public services owned or operated by
any instrumentality of the National
Government or by any government-owned
or controlled corporation, except with
respect to the fixing of rates."

Concepcion, C.J., Dizon, Makalintal,

Sanchez, Castro, Angeles, Fernando and
Capistrano, JJ., concur.
Zaldivar, J., is on leave.
Footnotes
1

Owner of electric plants and holder of

franchises to maintain, operate, distribute
and supply electric light and power in the
towns of Calamba, Los Baos, Bay, Rizal,
Nagcarlan, Lilio, Majayjay, Magdalena,
Sta. Cruz and Pila, in the province of
Laguna.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-8888
November 29,
1957
SONG KIAT CHOCOLATE
FACTORY, plaintiff-appellant,
vs.

CENTRAL BANK OF THE

PHILIPPINES and VICENTE GELLA,
in his capacity as Treasurer of the
Philippines, defendants-appellees.
Rogelio M. Jalandoni for appellant.
Office of the Solicitor General Ambrosio
Padilla and Solicitor Jose P. Alejandro for
appellee, Vicente Gella.
Nat. M. Balbao and F. E. Evangelista for
appellee, Central Bank of the Philippines.

dried cocoa beans.

SEC. 2 of the aforesaid Act provides that
"the tax collected or foreign exchange
used for the payment of costs
transportation and/or other charges
incident to importation into the
Philippines of rice, flour ..soya beans,
butterfat, chocolate, malt syrup .. shall be
refunded to any importer making
application therefor, upon satisfactory
proof of actual importation . . ."

BENGZON, J.:
The question in this appeal is whether
cocoa beans may be considered as
"chocolate" for the purposes of exemption
from the foreign exchange tax imposed by
Republic Act No. 601 as amended.
During the period from January 8, 1953 to
October 9, 1953, the plaintiff appellant
imported sun dried cocoa beans for which
it paid the foreign exchange tax of 17 per
cent totalling P74,671.04. Claiming
exemption from said tax under section 2
of same Act, it sued the Central Bank that
had exacted payment; and in its amended
complaint it included the Treasurer of the
Philippines. The suit was filed in the
Manila Court of First Instance, wherein
defendants submitted in due time a motion
to dismiss on the grounds: first, the
complaint stated no cause of action
because
cocoa
beans
were
not
"chocolate"; and second, it was a suit
against the Government without the
latter's consent.
The Hon. Gregorio S. Narvasa, Judge,
sustained the motion, and dismissed the
case by his order of November 19, 1954.
Hence this appeal.
The lower court, appellant contends, erred
in dismissing the case and in holding that
the term "chocolate" does not include sun

In support of its contention appellant

quotes
from
dictionaries
and
encyclopedias interchangeably using the
words "chocolate", "cacao" and "cocoa".
Yet we notice that the quotations refer to
"cocoa" as chocolate nut" "chocolate
bean" or "chocolate tree." And the legal
exemption refers to "chocolate" not the
bean, nor the nut nor the tree. We agree
with the Solicitor General and the other
counsel of respondents that in common
parlance the law is presumed to refer to it1
chocolate is a manufactured or finished
product made out of cocoa beans, or
"cacao" beans as they are locally known.
We may take notice of the fact that
grocery stores sell powdered cocoa beans
as chocolate, labeled "cocoa powder", or
simply "cocoa". They are, however, really
chocolate; they are not cocoa beans. The
manufacture of chocolate involves several
processes, such as selecting and drying the
cocoa beans, then roasting, grinding,
sieving and blending.2 Cocoa beans do not
become chocolate unless and until they
have undergone the manufacturing
processes above described. The first is raw
material, the other finished product.
The courts regard "chocolate" as
"Chocolate" is a preparation of roasted
cacao beans without the abstraction of the
butter and always contains sugar and

added cacao butter. Rockwood & Co., vs.

American President Lines, D. C. N. J., 68
F. Supp. 224, 226.
Chocolate is a cocoa bean roasted,
cracked, shelled, crushed, ground, and
molded in cakes. It contains no sugar, and
is in general use in families. Sweetened
chocolate is manufactured in the same
way but the paste is mixed wit sugar, and
is used by confectioners in making
chocolate confections. In re Schiling, 53 F.
81, 82, 3 C. C. A. 440.
In view of the foregoing, and having in
mind the principle of strict construction of
statutes exempting from taxation,3we are
of the opinion and so hold, that the
exemption for "chocolate" in the above
section 2 does not include "cocoa beans".
The one is raw material, the other
manufactured consumer product; the latter
is ready for human consumption; the
former is not.
However, we cannot stop here, because in
August 1954 suit was brought in May
1954 Congress approved Republic Act
1197 amending section 2 by substituting
"cocoa beans" for "chocolate." This
shows, maintains the appellant, the
Legislature's intention to include cocoa
beans in the word "chocolate." In fact, it
goes on, the Committee Chairman who
reported House Bill No. 2676 which
became Republic Act 1197, declared
before the House.
Mr. ROCES: Mr. SPEAKER, on line 8
page 1, after the word 'canned', strike out
the words, 'fresh, frozen and' and also the
words 'other beef', on line 9 and on the
same line, line 9, after the word
'chocolate', insert the words '(COCOA
BEANS)' in parenthesis ( ). I am
proposing to insert the words '(COCOA
BEANS)' in parenthesis ( ) after the word

chocolate, Mr. Speaker, in order to clarify

any doubt and manifest the intention of
the past Congress that the word 'chocolate'
should mean 'cocoa beans.
In reply to this, appellees point out that
said chairman could not have spoken of
the Congressional intention in approving
Republic Act 601 because he was not a
member of the Congress that passed said
Act. Naturally, all he could state was his
own interpretation of such piece of
legislation. Courts do not usually give
decisive weight to one legislator's opinion,
expressed in Congressional debates
concerning the application of existing
laws.4 Yet even among the legislators
taking part in the consideration of the
amendatory statute (Republic Act 1197)
the impression prevailed that, as the law
then stood5 chocolate candy or chocolate
bar was exempted, but cocoa beans were
not. Here are Senator Peralta's statements
during the discussion of the same House
Bill No. 2576:
SENATOR PERALTA: I signed that
conference report and I am really bound
by it, but, Mr. President, a few hours ago I
received some information which maybe
the chairman would like to know, to the
effect that we allow chocolate bar,
chocolate candy to come this country
except from the 17 per cent tax when we
do not allow cocoa beans, out of which
our local manufacturers can make
chocolate candy, exempted. So why do we
not take off that exemption for chocolate
and instead put 'cocoa beans' so as to
benefit our manufacturers of chocolate
candy?
xxx xxx xxx.
Senator PERALTA: Yes, I agree with the
chairman, only I was just wondering if the

chairman, might not consider the fact that

in view of the information, this seems to
be inconsistent we allow chocolate to
come here exempt and not exempt cocoa
beans which is used by our manufacturers
in making chocolate candy.
And Senator Puyat is quoted as saying, in
the same connection:
MR. PRESIDENT, On the same page
(page 1), line 9, delete "cocoa beans". The
text as it came to the Senate was
misleading. In the original law the
exemption is for chocolate and the version
that we got from the Lower House is
"(cocoa beans)" giving the impression that
chocolate and cocoa beans are
synonymous. Now I think this is a sort of
a rider, so your committee recommends
the deletion of those words. (Journal of
the Senate, July 30, 1954, re H. B. No.
2576, Emphasis ours.)
Other parts of the Congressional record
quoted in the briefs would seem to show
that in approving House Bill No. 2576, the
Congress agreed to exempt "cocoa beans"
instead of chocolate with a view to
favoring localmanufacturers of chocolate
products.6 A change of legislative policy,
as appellees contend7 not a declaration
or clarification of previous Congressional
purpose. In fact, as indicating, the
Government's new policy of exemptingfor
the first time importations of "cocoa
beans," there
is
the
President's
proclamation No. 62 of September 2, 1954
issued in accordance with Republic Act
No. 1197 specifying that said exemption
(of cocoa beans) shall operate from and
after September 3, 1954 not before. As
a general rule, it may be added, statutes
operate prospectively.
Observe that appellant's cocoa beans had

been imported during January-October

1953, i.e. before the exemption decree.
After the foregoing discussion, it is hardly
necessary to express our approval of the
lower court's opinion about plaintiff's
cause of action, or the lack of it. And it
becomes unnecessary to consider the other
contention of defendants that this is a suit
against the Government without its
consent.
The order of dismissal is affirmed, with
costs against appellant.
Paras, C. J., Padilla, Montemayor, Reyes,
A.,
Bautista
Angelo,
Labrador,
Concepcion, Reyes, J. B. L., Endencia,
and Felix, JJ., concur.
Footnote
1

"As a general rule words used in a statute

are to be given their usual and commonly
understood meaning .. ." C.J.S. p. 639.
2

CF. Encyclopedia Americana (1954) Vol.

V, p. 129, 130; Encyclopedia Britannica,
Vol. 5 (1945 ed.) p. 948.
3

Exemptions are never presumed, the

burden is on the claimant to establish
clearly his right to exemption and an
alleged grant of exemption will be strictly
construed and cannot be made out by
inference or implication but must be
beyond reasonable doubt. In other words,
since taxation is the rule and exemption
the exception, the intention to make an
exemption ought to be expressed in clear
and unambiguous terms. (Cooley on
Taxation, 4th ed. Vol. 2. 1303.).
4

Interpretation of laws is for the Courts

(See 82 C. J. S. pp. 745, 746). Even
statutes declaring "what the law was

before" are not binding on courts.

Endencia vs. David, 93 Phil., 696, 49 Off.
Gaz., 4825.
5

Section 2 of Republic Act 601 was

amended first by Republic Act 814 and
later by Republic Act 871. In both
amendments "chocolate" was retained.
6
Whereas the exemption of "chocolate"
aimed to benefit the consumers thereof.
7
See footnote 5.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 93833 September 28, 1995
SOCORRO D. RAMIREZ, petitioner,
vs.
HONORABLE COURT OF APPEALS,
and ESTER S. GARCIA, respondents.
KAPUNAN, J.:
A civil case damages was filed by
petitioner Socorro D. Ramirez in the
Regional Trial Court of Quezon City
alleging that the private respondent, Ester
S. Garcia, in a confrontation in the latter's
office, allegedly vexed, insulted and
humiliated her in a "hostile and furious
mood" and in a manner offensive to
petitioner's dignity and personality,"
contrary to morals, good customs and
public policy." 1
In support of her claim, petitioner

produced a verbatim transcript of the

event and sought moral damages,
attorney's fees and other expenses of
litigation in the amount of P610,000.00, in
addition to costs, interests and other
reliefs awardable at the trial court's
discretion. The transcript on which the
civil case was based was culled from a
tape recording of the confrontation made
by petitioner. 2 The transcript reads as
follows:
Plaintiff Soccoro D. Ramirez (Chuchi)
Good Afternoon M'am.
Defendant Ester S. Garcia (ESG) Ano
ba ang nangyari sa 'yo, nakalimot ka na
kung paano ka napunta rito, porke
member ka na, magsumbong ka kung ano
ang gagawin ko sa 'yo.
CHUCHI Kasi, naka duty ako noon.
ESG Tapos iniwan no. (Sic)

Panunumbyoyan na kita (Sinusumbatan na

kita).
CHUCHI Itutuloy ko na M'am sana
ang duty ko.
ESG Kaso ilang beses na akong
binabalikan doon ng mga no (sic) ko.
ESG Nakalimutan mo na ba kung
paano ka pumasok sa hotel, kung on your
own merit alam ko naman kung gaano ka
"ka bobo" mo. Marami ang nag-aaply
alam kong hindi ka papasa.
CHUCHI Kumuha kami ng exam
noon.
ESG Oo, pero hindi ka papasa.
CHUCHI Eh, bakit ako ang nakuha ni
Dr. Tamayo
ESG Kukunin ka kasi ako.
CHUCHI Eh, di sana

CHUCHI Hindi m'am, pero ilan beses

na nila akong binalikan, sabing ganoon
ESG Ito and (sic) masasabi ko sa 'yo,
ayaw kung (sic) mag explain ka, kasi
hanggang 10:00 p.m., kinabukasan hindi
ka na pumasok. Ngayon ako ang babalik
sa 'yo, nag-aaply ka sa States, nag-aaply
ka sa review mo, kung kakailanganin ang
certification mo, kalimutan mo na kasi
hindi ka sa akin makakahingi.
CHUCHI Hindi M'am. Kasi ang ano ko
talaga noon i-cocontinue ko up to 10:00
p.m.
ESG Bastos ka, nakalimutan mo na
kung paano ka pumasok dito sa hotel.
Magsumbong ka sa Union kung gusto mo.
Nakalimutan mo na kung paano ka
nakapasok dito "Do you think that on your
own makakapasok ka kung hindi ako.

ESG Huwag mong ipagmalaki na may

utak ka kasi wala kang utak. Akala mo ba
makukuha ka dito kung hindi ako.
CHUCHI Mag-eexplain ako.
ESG Huwag na, hindi ako mag-papaexplain sa 'yo, makaalala ka kung paano
ka puma-rito. "Putang-ina" sasabi-sabihin
mo kamag-anak ng nanay at tatay mo ang
mga magulang ko.
ESG Wala na akong pakialam, dahil
nandito ka sa loob, nasa labas ka puwede
ka ng hindi pumasok, okey yan nasaloob
ka umalis ka doon.
CHUCHI Kasi M'am, binbalikan ako
ng mga taga Union.
ESG Nandiyan na rin ako, pero huwag

mong kalimutan na hindi ka makakapasok

kung hindi ako. Kung hindi mo kinikilala
yan okey lang sa akin, dahil tapos ka na.

the said recording to other person.

CHUCHI Ina-ano ko m'am na utang na

loob.
ESG Huwag na lang, hindi mo utang
na loob, kasi kung baga sa no,
nilapastangan mo ako.
CHUCHI Paano kita nilapastanganan?

Pasay City, Metro Manila, September 16,

1988.

ESG Mabuti pa lumabas ka na. Hindi

na ako makikipagusap sa 'yo. Lumabas ka
na. Magsumbong ka. 3
As a result of petitioner's recording of the
event and alleging that the said act of
secretly taping the confrontation was
illegal, private respondent filed a criminal
case before the Regional Trial Court of
Pasay City for violation of Republic Act
4200, entitled "An Act to prohibit and
penalize wire tapping and other related
violations of private communication, and
other purposes." An information charging
petitioner of violation of the said Act,
dated October 6, 1988 is quoted herewith:
INFORMATION
The Undersigned Assistant City Fiscal
Accusses Socorro D. Ramirez of Violation
of Republic Act No. 4200, committed as
follows:
That on or about the 22nd day of
February, 1988, in Pasay City Metro
Manila, Philippines, and within the
jurisdiction of this honorable court, the
above-named accused, Socorro D.
Ramirez not being authorized by Ester S.
Garcia to record the latter's conversation
with said accused, did then and there
willfully, unlawfully and feloniously, with
the use of a tape recorder secretly record
the said conversation and thereafter
communicate in writing the contents of

Contrary to law.

MARIANO M. CUNETA
Asst. City Fiscal
Upon arraignment, in lieu of a plea,
petitioner filed a Motion to Quash the
Information on the ground that the facts
charged do not constitute an offense,
particularly a violation of R.A. 4200. In an
order May 3, 1989, the trial court granted
the Motion to Quash, agreeing with
petitioner that 1) the facts charged do not
constitute an offense under R.A. 4200;
and that 2) the violation punished by R.A.
4200 refers to a the taping of a
communication by a personother than a
participant to the communication. 4
From the trial court's Order, the private
respondent filed a Petition for Review on
Certiorari with this Court, which
forthwith referred the case to the Court of
Appeals in a Resolution (by the First
Division) of June 19, 1989.
On February 9, 1990, respondent Court of
Appeals promulgated its assailed Decision
declaring the trial court's order of May 3,
1989 null and void, and holding that:
[T]he allegations sufficiently constitute an
offense punishable under Section 1 of
R.A. 4200. In thus quashing the
information based on the ground that the
facts alleged do not constitute an offense,
the respondent judge acted in grave abuse
of discretion correctible by certiorari. 5
Consequently, on February 21, 1990,
petitioner
filed
a
Motion
for
Reconsideration which respondent Court
of Appeals denied in its Resolution 6 dated

June 19, 1990. Hence, the instant petition.

Petitioner vigorously argues, as her "main
and principal issue" 7 that the applicable
provision of Republic Act 4200 does not
apply to the taping of a private
conversation by one of the parties to the
conversation. She contends that the
provision
merely
refers
to
the
unauthorized taping of a private
conversation by a party other than those
involved in the communication.8 In
relation to this, petitioner avers that the
substance or content of the conversation
must be alleged in the Information,
otherwise the facts charged would not
constitute a violation of R.A. 4200. 9
Finally, petitioner agues that R.A. 4200
penalizes the taping of a "private
communication,"
not
a
"private
conversation" and that consequently, her
act of secretly taping her conversation
with private respondent was not illegal
under the said act. 10
We disagree.
First, legislative intent is determined
principally from the language of a statute.
Where the language of a statute is clear
and unambiguous, the law is applied
according to its express terms, and
interpretation would be resorted to only
where a literal interpretation would be
either impossible 11 or absurb or would
lead to an injustice. 12
Section 1 of R.A. 4200 entitled, " An Act
to Prohibit and Penalized Wire Tapping
and Other Related Violations of Private
Communication and Other Purposes,"
provides:
Sec. 1. It shall be unlawfull for any
person, not being authorized by all the
parties to any private communication or
spoken word, to tap any wire or cable, or
by using any other device or arrangement,
to secretly overhear, intercept, or record

such communication or spoken word by

using a device commonly known as a
dictaphone or dictagraph or detectaphone
or walkie-talkie or tape recorder, or
however otherwise described.
The aforestated provision clearly and
unequivocally makes it illegal for any
person, not authorized by all the parties to
any private communication to secretly
record such communication by means of a
tape recorder. The law makes no
distinction as to whether the party sought
to be penalized by the statute ought to be a
party other than or different from those
involved in the private communication.
The statute's intent to penalize all persons
unauthorized to make such recording is
underscored by the use of the qualifier
"any". Consequently, as respondent Court
of Appeals correctly concluded, "even a
(person) privy to a communication who
records his private conversation with
another without the knowledge of the
latter (will) qualify as a violator" 13 under
this provision of R.A. 4200.
A perusal of the Senate Congressional
Records,
moreover,
supports
the
respondent court's conclusion that in
enacting R.A. 4200 our lawmakers indeed
contemplated
to
make
illegal,
unauthorized tape recording of private
conversations or communications taken
either by the parties themselves or by third
persons. Thus:
xxx xxx xxx
Senator Taada: That qualified only
"overhear".
Senator Padilla: So that when it is
intercepted or recorded, the element of
secrecy would not appear to be material.
Now, suppose, Your Honor, the recording

is not made by all the parties but by some

parties and involved not criminal cases
that would be mentioned under section 3
but would cover, for example civil cases
or special proceedings whereby a
recording is made not necessarily by all
the parties but perhaps by some in an
effort to show the intent of the parties
because the actuation of the parties prior,
simultaneous even subsequent to the
contract or the act may be indicative of
their intention. Suppose there is such a
recording, would you say, Your Honor,
that the intention is to cover it within the
purview of this bill or outside?
Senator Taada: That is covered by the
purview of this bill, Your Honor.
Senator Padilla: Even if the record should
be used not in the prosecution of offense
but as evidence to be used in Civil Cases
or special proceedings?
Senator Taada: That is right. This is a
complete ban on tape recorded
conversations
taken
without
the
authorization of all the parties.
Senator Padilla: Now, would that be
reasonable, your Honor?
Senator Taada: I believe it is reasonable
because it is not sporting to record the
observation of one without his knowing it
and then using it against him. It is not fair,
it is not sportsmanlike. If the purpose;
Your honor, is to record the intention of
the parties. I believe that all the parties
should know that the observations are
being recorded.

was to say that in meetings of the board of

directors where a tape recording is taken,
there is no objection to this if all the
parties know. It is but fair that the people
whose remarks and observations are being
made should know that the observations
are being recorded.
Senator Padilla: Now, I can understand.
Senator Taada: That is why when we
take statements of persons, we say:
"Please be informed that whatever you say
here may be used against you." That is
fairness and that is what we demand. Now,
in spite of that warning, he makes
damaging statements against his own
interest, well, he cannot complain any
more. But if you are going to take a
recording of the observations and remarks
of a person without him knowing that it is
being taped or recorded, without him
knowing that what is being recorded may
be used against him, I think it is unfair.
xxx xxx xxx
(Congression Record, Vol. III, No. 31, p.
584, March 12, 1964)
Senator Diokno: Do you understand, Mr.
Senator, that under Section 1 of the bill as
now worded, if a party secretly records a
public speech, he would be penalized
under Section 1? Because the speech is
public, but the recording is done secretly.
Senator Taada: Well, that particular
aspect is not contemplated by the bill. It is
the communication between one person
and another person not between a
speaker and a public.

Senator Padilla: This might reduce the

utility of recorders.

xxx xxx xxx

Senator Taada: Well no. For example, I

(Congressional Record, Vol. III, No. 33, p.

626, March 12, 1964)

xxx xxx xxx
The unambiguity of the express words of
the provision, taken together with the
above-quoted deliberations from the
Congressional Record, therefore plainly
supports the view held by the respondent
court that the provision seeks to penalize
even those privy to the private
communications. Where the law makes no
distinctions, one does not distinguish.
Second, the nature of the conversations is
immaterial to a violation of the statute.
The substance of the same need not be
specifically alleged in the information.
What R.A. 4200 penalizes are the acts of
secretly overhearing, intercepting or
recording private communications by
means of the devices enumerated therein.
The mere allegation that an individual
made a secret recording of a private
communication by means of a tape
recorder would suffice to constitute an
offense under Section 1 of R.A. 4200. As
the Solicitor General pointed out in his
COMMENT before the respondent court:
"Nowhere (in the said law) is it required
that before one can be regarded as a
violator, the nature of the conversation, as
well as its communication to a third
person should be professed."14
Finally, petitioner's contention that the
phrase "private communication" in
Section 1 of R.A. 4200 does not include
"private conversations" narrows the
ordinary
meaning
of
the
word
"communication" to a point of absurdity.
The word communicate comes from the
latin word communicare, meaning "to
share or to impart." In its ordinary
signification, communication connotes the
act of sharing or imparting signification,
communication connotes the act of

sharing or imparting, as in a conversation,

15
or signifies the "process by which
meanings or thoughts are shared between
individuals through a common system of
symbols (as language signs or gestures)" 16
These definitions are broad enough to
include verbal or non-verbal, written or
expressive communications of "meanings
or thoughts" which are likely to include
the emotionally-charged exchange, on
February 22, 1988, between petitioner and
private respondent, in the privacy of the
latter's office. Any doubts about the
legislative body's meaning of the phrase
"private communication" are, furthermore,
put to rest by the fact that the terms
"conversation" and "communication" were
interchangeably used by Senator Taada
in his Explanatory Note to the bill quoted
below:
It has been said that innocent people have
nothing to fear from their conversations
being overheard. But this statement
ignores the usual nature of conversations
as well the undeniable fact that most, if
not all, civilized people have some aspects
of their lives they do not wish to expose.
Free conversations are often characterized
by exaggerations, obscenity, agreeable
falsehoods, and the expression of antisocial desires of views not intended to be
taken seriously. The right to the privacy of
communication, among others, has
expressly
been
assured
by
our
Constitution. Needless to state here, the
framers of our Constitution must have
recognized the nature of conversations
between individuals and the significance
of man's spiritual nature, of his feelings
and of his intellect. They must have
known that part of the pleasures and
satisfactions of life are to be found in the
unaudited, and free exchange of
communication between individuals
free from every unjustifiable intrusion by

whatever means. 17
In Gaanan vs. Intermediate Appellate
Court, 18 a case which dealt with the issue
of telephone wiretapping, we held that the
use of a telephone extension for the
purpose of overhearing a private
conversation without authorization did not
violate R.A. 4200 because a telephone
extension devise was neither among those
"device(s) or arrangement(s)" enumerated
therein, 19 following the principle that
"penal statutes must be construed strictly
in favor of the accused." 20 The instant
case turns on a different note, because the
applicable facts and circumstances
pointing to a violation of R.A. 4200 suffer
from no ambiguity, and the statute itself
explicitly mentions the unauthorized
"recording" of private communications
with the use of tape-recorders as among
the acts punishable.
WHEREFORE, because the law, as
applied to the case at bench is clear and
unambiguous and leaves us with no
discretion, the instant petition is hereby
DENIED. The decision appealed from is
AFFIRMED. Costs against petitioner.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 82511 March 3, 1992
GLOBE-MACKAY CABLE AND
RADIO CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS
COMMISSION and IMELDA
SALAZAR, respondents.
Castillo, Laman, Tan & Pantaleon for
petitioner.
Gerardo S. Alansalon for private
respondent.
ROMERO, J.:
For private respondent Imelda L. Salazar,
it would seem that her close association
with Delfin Saldivar would mean the loss
of her job. In May 1982, private
respondent was employed by GlobeMackay Cable and Radio Corporation
(GMCR) as general systems analyst. Also
employed by petitioner as manager for
technical operations' support was Delfin
Saldivar with whom private respondent
was allegedly very close.
Sometime in 1984, petitioner GMCR,
prompted by reports that company
equipment and spare parts worth
thousands of dollars under the custody of
Saldivar were missing, caused the
investigation of the latter's activities. The
report dated September 25, 1984 prepared
by the company's internal auditor, Mr.
Agustin Maramara, indicated that Saldivar
had entered into a partnership styled

Concave Commercial and Industrial

Company with Richard A. Yambao, owner
and manager of Elecon Engineering
Services (Elecon), a supplier of petitioner
often recommended by Saldivar. The
report also disclosed that Saldivar had
taken petitioner's missing Fedders
airconditioning unit for his own personal
use without authorization and also
connived with Yambao to defraud
petitioner
of
its
property.
The
airconditioner was recovered only after
petitioner GMCR filed an action for
replevin against Saldivar. 1
It likewise appeared in the course of
Maramara's investigation that Imelda
Salazar violated company reglations by
involving
herself
in
transactions
conflicting with the company's interests.
Evidence showed that she signed as a
witness to the articles of partnership
between Yambao and Saldivar. It also
appeared that she had full knowledge of
the loss and whereabouts of the Fedders
airconditioner but failed to inform her
employer.
Consequently, in a letter dated October 8,
1984, petitioner company placed private
respondent Salazar under preventive
suspension for one (1) month, effective
October 9, 1984, thus giving her thirty
(30) days within which to, explain her
side. But instead of submitting an
explanations three (3) days later or on
October 12, 1984 private respondent filed
a complaint against petitioner for illegal
suspension, which she subsequently
amended to include illegal dismissal,
vacation and sick leave benefits, 13th
month pay and damages, after petitioner
notified her in writing that effective
November 8, 1984, she was considered
dismissed "in view of (her) inability to
refute and disprove these findings. 2
After due hearing, the Labor Arbiter in a

decision dated July 16, 1985, ordered

petitioner company to reinstate private
respondent to her former or equivalent
position and to pay her full backwages
and other benefits she would have
received were it not for the illegal
dismissal. Petitioner was also ordered to
pay private respondent moral damages of
P50,000.00. 3
On appeal, public respondent National
Labor Relations, Commission in the
questioned resolution dated December 29,
1987 affirmed the aforesaid decision with
respect to the reinstatement of private
respondent but limited the backwages to a
period of two (2) years and deleted the
award for moral damages. 4
Hence, this petition assailing the Labor
Tribunal for having committed grave
abuse of discretion in holding that the
suspension and subsequent dismissal of
private respondent were illegal and in
ordering her reinstatement with two (2)
years' backwages.
On the matter of preventive suspension,
we find for petitioner GMCR.
The inestigative findings of Mr.
Maramara, which pointed to Delfin
Saldivar's acts in conflict with his position
as
technical
operations
manager,
necessitated immediate and decisive
action on any employee closely,
associated with Saldivar. The suspension
of Salazar was further impelled by th.e
discovery of the missing Fedders
airconditioning unit inside the apartment
private respondent shared with Saldivar.
Under such circumstances, preventive
suspension was the proper remedial
recourse available to the company
pending Salazar's investigation. By itself,
preventive suspension does, not signify
that the company has adjudged the
employee guilty of the charges she was

asked to answer and explain. Such

disciplinary measure is resorted to for the
protection of the company's property
pending investigation any alleged
malfeasance or misfeasance committed by
the employee. 5
Thus, it is not correct to conclude that
petitioner GMCR had violated Salazar's
right to due process when she was
promptly suspended. If at all, the fault, lay
with private respondent when she ignored
petitioner's memorandum of October 8,
1984 "giving her ample opportunity to
present (her) side to the Management."
Instead, she went directly to the Labor
Department and filed her complaint for
illegal suspension without giving her
employer a chance to evaluate her side of
the controversy.
But while we agree with the propriety of
Salazar's preventive suspension, we hold
that her eventual separation from
employment was not for cause.
What is the remedy in law to rectify an
unlawful dismissal so as to "make whole"
the victim who has not merely lost her job
which, under settled Jurisprudence, is a
property right of which a person is not to
be deprived without due process, but also
the compensation that should have
accrued to her during the period when she
was unemployed?
Art. 279 of the Labor Code, as amended,
provides:
Security of Tenure. In cases of regular
employment, the employer shall not
terminate the services of an employee
except for a just cause or when authorized
by this Title. An employee who is unjustly
dismissed from work shall be entitled to
reinstatement without loss of seniority
rights and other privileges and to his full
backwages, inclusive of allowances, and
to his other benefits or their monetary

equivalent computed from the time his

compensation was withheld from him up
to the time of his actual reinstatement. 6
(Emphasis supplied)
Corollary thereto are the following
provisions of the Implementing Rules and
Regulations of the Labor Code:
Sec. 2. Security of Tenure. In cases of
regular employments, the employer shall
not terminate the services of an employee
except for a just cause as provided in the
Labor Code or when authorized by
existing laws.
Sec. 3. Reinstatement. An employee
who is unjustly dismissed from work shall
by entitled to reinstatement without loss of
seniority rights and to backwages." 7
(Emphasis supplied)
Before proceeding any furthers, it needs
must be recalled that the present
Constitution has gone further than the
1973 Charter in guaranteeing vital social
and economic rights to marginalized
groups of society, including labor. Given
the pro-poor orientation of several
articulate
Commissioners
of
the
Constitutional Commission of 1986, it
was not surprising that a whole new
Article emerged on Social Justice and
Human Rights designed, among other
things, to "protect and enhance the right of
all the people to human dignity, reduce
social, economic and political inequalities,
and remove cultural inequities by
equitably diffusing wealth and political
power for the common good."8 Proof of
the priority accorded to labor is that it
leads the other areas of concern in the
Article on Social Justice, viz., Labor ranks
ahead of such topics as Agrarian and
Natural Resources Reform, Urban Land
Roform and Housing, Health, Women,
Role and Rights of Poople's Organizations

and Human Rights. 9

The opening paragraphs on Labor states
The State shall afford full protection to
labor, local and overseas, organized and
unorganized,
and
promote
full
employment and equality of employment
opportunities for all.
It shall guarantee the rights of all workers
to self-organization, collective bargaining
and negotiations, and peaceful concerted
activities, including the right to strike in
accordance with law. They shall be
entitled to security of tenure, humane
conditions of work, and a living wage.
They shall also participate in policy and
decision-making processes affecting their
rights and benefits is may be provided by
law. 10 (Emphasis supplied)
Compare this with the sole.provision on
Labor in the 1973 Constitution under the
Article an Declaration of Principles and
State Policies that provides:
Sec. 9. The state shall afford protection to
labor, promote full employment and
equality in employment, ensure equal
work opportunities regardless of sex, race,
or creed, and regulate the relations
between workers and employers. The
State shall ensure the rights of workers to
self-organization, collective baegaining,
security of tenure, and just and humane
conditions of work. The State may provide
for compulsory arbitration. 11
To be sure, both Charters recognize
"security of tenure" as one of the rights of
labor which the State is mandated to
protect. But there is no gainsaying the fact
that the intent of the framers of the present
Constitution was to give primacy to the
rights of labor and afford the sector "full
protection," at least greater protection than

heretofore accorded them, regardless of

the geographical location of the workers
and whether they are organized or not.
It was then CONCOM Commissioner,
now Justice Hilario G. Davide, Jr., who
substantially contributed to the present
formulation of the protection to labor
provision and proposed that the same be
incorporated in the Article on Social
Justice and not just in the Article on
Declaration of Principles and State
Policies "in the light of the special
importance that we are giving now to
social justice and the necessity of
emphasizing the scope and role of social
justice in national development." 12
If we have taken pains to delve into the
background of the labor provisions in our
Constitution and the Labor Code, it is but
to stress that the right of an employee not
to be dismissed from his job except for a
just or authorized cause provided by law
has assumed greater importance under the
1987 Constitution with the singular
prominence labor enjoys under the article
on Social Justice. And this transcendent
policy has been translated into law in the
Labor Code. Under its terms, where a case
of unlawful or unauthorized dismissal has
been proved by the aggrieved employee,
or on the other hand, the employer whose
duty it is to prove the lawfulness or
justness of his act of dismissal has failed
to do so, then the remedies provided in
Article 279 should find, application.
Consonant with this liberalized stance visa-vis labor, the legislature even went
further by enacting Republic Act No. 6715
which took effect on March 2, 1989 that
amended said Article to remove any
possible ambiguity that jurisprudence may
have generated which watered down the
constitutional intent to grant to labor "full
protection."13
To go back to the instant case, there being

no evidence to show an authorized, much

less a legal, cause for the dismissal of
private respondent, she had every right,
not only to be entitled to reinstatement,
but ay well, to full backwages." 14
The intendment of the law in prescribing
the twin remedies of reinstatement and
payment of backwages is, in the former, to
restore the dismissed employee to her
status before she lost her job, for the
dictionary meaning of the word "reinstate"
is "to restore to a state, conditione
positions etc. from which one had been
removed" 15 and in the latter, to give her
back the income lost during the period of
unemployment. Both remedies, looking to
the past, would perforce make her
"whole."
Sadly, the avowed intent of the law has at
times been thwarted when reinstatement
has not been forthcoming and the hapless
dismissed employee finds himself on the
outside looking in.
Over time, the following reasons have
been advanced by the Court for denying
reinstatement under the facts of the case
and the law applicable thereto; that
reinstatement can no longer be effected in
view of the long passage of time (22 years
of litigation) or because of the realities of
the situation; 16 or that it would be
"inimical to the employer's interest; " 17 or
that reinstatement may no longer be
feasible; 18 or, that it will not serve the best
interests of the parties involved; 19 or that
the company would be prejudiced by the
workers' continued employment; 20 or that
it will not serve any prudent purpose as
when supervening facts have transpired
which make execution on that score unjust
or inequitable 21 or, to an increasing
extent, due to the resultant atmosphere of
"antipathy and antagonism" or "strained
relations" or "irretrievable estrangement"

between the employer and the employee.

22

In lieu of reinstatement, the Court has

variously ordered the payment of
backwages and separation pay 23 or solely
separation pay. 24
In the case at bar, the law is on the side of
private respondent. In the first place the
wording of the Labor Code is clear and
unambiguous: "An employee who is
unjustly dismissed from work shall be
entitled to reinstatement. . . . and to his
full backwages. . . ." 25 Under the
principlesof statutory construction, if a
statute is clears plain and free from
ambiguity, it must be given its literal
meaning and applied without attempted
interpretation. This plain-meaning rule or
verba legis derived from the maxim index
animi sermo est (speech is the index of
intention) rests on the valid presumption
that the words employed by, the
legislature in a statute correctly express its
intent or will and preclude the court from
construing it differently. 26 The legislature
is presumed to know the meaning of the
words, to:have used words advisedly, and
to have expressed its intent by the use of
such words as are found in the statute. 27
Verba legis non est recedendum, or from
the words of a statute there should be no
departure. Neither does the provision
admit of any qualification. If in the
wisdom of the Court, there may be a
ground or grounds for non-application of
the above-cited provision, this should be
by way of exception, such as when the
reinstatement may be inadmissible due to
ensuing strained relations between the
employer and the employee.
In such cases, it should be proved that the
employee concerned occupies a position
where he enjoys the trust and confidence
of his employer; and that it is likely that if
reinstated, an atmosphere of antipathy and

antagonism may be generated as to

adversely affect the efficiency and
productivity of the employee concerned.
A few examples, will suffice to illustrate
the Court's application of the above
principles: where the employee is a VicePresident for Marketing and as such,
enjoys the full trust and confidence of top
management; 28 or is the Officer-InCharge of the extension office of the bank
where he works; 29 or is an organizer of a
union who was in a position to sabotage
the union's efforts to organize the workers
in
commercial
and
industrial
establishments; 30 or is a warehouseman of
a non-profit organization whose primary
purpose is to facilitate and maximize
voluntary gifts. by foreign individuals and
organizations to the Philippines; 31 or is a
manager of its Energy Equipment Sales. 32
Obviously, the principle of "strained
relations"
cannot
be
applied
indiscriminately.
Otherwisey
reinstatement can never be possible
simply because some hostility is
invariably engendered between the parties
as a result of litigation. That is human
nature. 33
Besides, no strained relations should arise
from a valid and legal act of asserting
one's right; otherwise an employee who
shall assert his right could be easily
separated from the service, by merely
paying his separation pay on the pretext
that his relationship with his employer had
already become strained. 34
Here, it has not been proved that the
position of private respondent as systems
analyst is one that may be characterized as
a position of trust and confidence such
that if reinstated, it may well lead to
strained relations between employer and

employee. Hence, this does not constitute

an exception to the general rule mandating
reinstatement for an employee who has
been unlawfully dismissed.
On the other hand, has she betrayed any
confidence reposed in her by engaging in
transactions that may have created conflict
of interest situations? Petitioner GMCR
points out that as a matter of company
policy, it prohibits its employees from
involving themselves with any company
that has business dealings with GMCR.
Consequently, when private respondent
Salazar signed as a witness to the
partnership papers of Concave (a supplier
of Ultra which in turn is also a supplier of
GMCR), she was deemed to have placed.
herself in an untenable position as far as
petitioner was concerned.
However, on close scrutiny, we agree with
public
respondent
that
such
a
circumstance did not create a conflict of
interests situation. As a systems analyst,
Salazar was very far removed from
operations involving the procurement of
supplies. Salazar's duties revolved around
the development of systems and analysis
of designs on a continuing basis. In other
words, Salazar did not occupy a position
of trust relative to the approval and
purchase of supplies and company assets.
In the instant case, petitioner has
predicated its dismissal of Salazar on loss
of confidence. As we have held countless
times, while loss of confidence or breach
of trust is a valid ground for terminations
it must rest an some basis which must be
convincingly established. 35 An employee
who not be dismissed on mere
presumptions
and
suppositions.
Petitioner's allegation that since Salazar
and Saldivar lived together in the same
apartment, it "presumed reasonably that

complainant's sympathy would be with

Saldivar" and its averment that Saldivar's
investigation although unverified, was
probably true, do not pass this Court's test.
36
While we should not condone the acts of
disloyalty of an employee, neither should
we dismiss him on the basis of suspicion
derived from speculative inferences.
To rely on the Maramara report as a basis
for Salazar's dismissal would be most
inequitous because the bulk of the
findings centered principally oh her
friend's alleged thievery and anomalous
transactions as technical operations'
support manager. Said report merely
insinuated that in view of Salazar's special
relationship with Saldivar, Salazar might
have had direct knowledge of Saldivar's
questionable activities. Direct evidence
implicating private respondent is wanting
from the records.
It is also worth emphasizing that the
Maramara report came out after Saldivar
had already resigned from GMCR on May
31, 1984. Since Saldivar did not have the
opportunity to refute management's
findings, the report remained obviously
one-sided. Since the main evidence
obtained by petitioner dealt principally on
the alleged culpability of Saldivar, without
his having had a chance to voice his side
in view of his prior resignation, stringent
examination should have been carried out
to ascertain whether or not there existed
independent legal grounds to hold Salatar
answerable as well and, thereby, justify
her dismissal. Finding none, from the
records, we find her to have been
unlawfully dismissed.
WHEREFORE, the assailed resolution of
public respondent National Labor
Relations Commission dated December
29, 1987 is hereby AFFIRMED. Petitioner
GMCR is ordered to REINSTATE private

respondent Imelda Salazar and to pay her

back wages equivalent to her salary for a
period of two (2) years only.
This decision is immediately executory.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 109445 November 7, 1994
FELICITO BASBACIO, petitioner,
vs.
OFFICE OF THE SECRETARY,
DEPARTMENT OF JUSTICE,
FRANKLIN DRILON in his capacity as
Secretary of Justice, respondent.
Amparita S. Sta. Maria for petitioner.
MENDOZA, J.:
This case presents for determination the
scope of the State's liability under Rep.
Act No. 7309, which among other things
provides compensation for persons who
are unjustly accused, convicted and
imprisoned but on appeal are acquitted
and ordered released.
Petitioner Felicito Basbacio and his sonin-law, Wilfredo Balderrama, were
convicted of frustrated murder and of two
counts of frustrated murder for the killing
of Federico Boyon and the wounding of
the latter's wife Florida and his son Tirso,
at Palo, Calanuga, Rapu-Rapu, Albay, on
the night of June 26, 1988. The motive for
the killing was apparently a land dispute

between the Boyons and petitioner.

Petitioner and his son-in-law were
sentenced to imprisonment and ordered
immediately detained after their bonds
had been cancelled.
Petitioner and his son-in-law appealed.
Only petitioner's appeal proceeded to
judgment, however, as the appeal of the
other accused was dismissed for failure to
file his brief.
On June 22, 1992 the Court of Appeals
rendered a decision acquitting petitioner
on the ground that the prosecution failed
to prove conspiracy between him and his
son-in-law. He had been pointed to by a
daughter of Federico Boyon as the
companion of Balderrama when the latter
barged into their hut and without warning
started shooting, but the appellate court
ruled that because petitioner did nothing
more, petitioner's presence at the scene of
the crime was insufficient to show
conspiracy.
Based on his acquittal, petitioner filed a
claim under Rep. Act No. 7309, sec. 3(a),
which provides for the payment of
compensation to "any person who was
unjustly accused, convicted, imprisoned
but subsequently released by virtue of a
judgment of acquittal." 1 The claim was
filed with the Board of Claims of the
Department of Justice, but the claim was
denied on the ground that while
petitioner's presence at the scene of the
killing was not sufficient to find him
guilty beyond reasonable doubt, yet,
considering that there was bad blood
between him and the deceased as a result
of a land dispute and the fact that the
convicted murderer is his son-in-law, there
was basis for finding that he was
"probably guilty."

On appeal, respondent Secretary of Justice

affirmed the Board's ruling. Said the
Secretary of Justice in his resolution dated
March 11, 1993:
It is believed therefore that the phrase
"any person . . . unjustly accused,
convicted and imprisoned" in Section 3(a)
of R.A. No. 7309 refers to an individual
who was wrongly accused and imprisoned
for a crime he did not commit, thereby
making him "a victim of unjust
imprisonment." In the instant case,
however, Claimant/Appellant cannot be
deemed such a victim since a reading of
the decision of his acquittal shows that his
exculpation is not based on his innocence,
but upon, in effect, a finding of reasonable
doubt.
Petitioner brought this petition for review
on certiorari. Neither Rule 45 nor Rep.
Act No. 7309, however, provides for
review by certiorari of the decisions of
the Secretary of Justice. Nonetheless, in
view of the importance of the question
tendered, the Court resolved to treat the
petition as a special civil action for
certiorari under Rule 65.
Petitioner questions the basis of the
respondent's ruling that to be able to
recover under sec. 3(a) of the law the
claimant must on appeal be found to be
innocent of the crimes of which he was
convicted in the trial court. Through
counsel he contends that the language of
sec. 3(a) is clear and does not call for
interpretation. The "mere fact that the
claimant was imprisoned for a crime
which he was subsequently acquitted of is
already unjust in itself," he contends. To
deny his claim because he was not
declared innocent would be to say that his
imprisonment for two years while his
appeal was pending was justified.

Petitioner argues that there is only one

requirement for conviction in criminal
cases and that is proof beyond reasonable
doubt. If the prosecution fails to present
such proof, the presumption that the
accused is innocent stands and, therefore,
there is no reason for requiring that he be
declared innocent of the crime before he
can recover compensation for his
imprisonment.
Petitioner's contention has no merit. It
would require that every time an accused
is acquitted on appeal he must be given
compensation on the theory that he was
"unjustly convicted" by the trial court.
Such a reading of sec. 3(a) is contrary to
petitioner's
professed
canon
of
construction that when the language of the
statute is clear it should be given its
natural meaning. It leaves out of the
provision in question the qualifying word
"unjustly" so that the provision would
simply read: "The following may file
claims for compensation before the Board:
(a) any person who was accused,
convicted, imprisoned but subsequently
released by virtue of a judgment of
acquittal."
But sec. 3(a) requires that the claimant be
"unjustly accused, convicted [and]
imprisoned." The fact that his conviction
is reversed and the accused is acquitted is
not itself proof that the previous
conviction was "unjust." An accused may
be acquitted for a number of reasons and
his conviction by the trial court may, for
any of these reasons, be set aside. For
example, he may be acquitted not because
he is innocent of the crime charged but
because of reasonable doubt, in which
case he may be found civilly liable to the
complainant, because while the evidence
against him does not satisfy the quantum
of proof required for conviction, it may

nonetheless be sufficient to sustain a civil

action for damages. 2 In one case the
accused, an alien, was acquitted of
statutory rape with homicide because of
doubt as to the ages of the offended
parties who consented to have sex with
him. Nonetheless the accused was ordered
to pay moral and exemplary damages and
ordered deported. 3 In such a case to pay
the accused compensation for having been
"unjustly convicted" by the trial court
would be utterly inconsistent with his
liability to the complainant. Yet to follow
petitioner's theory such an accused would
be entitled to compensation under sec.
3(a).
The truth is that the presumption of
innocence has never been intended as
evidence of innocence of the accused but
only to shift the burden of proof that he is
guilty to the prosecution. If "accusation is
not synonymous with guilt,"4 so is the
presumption of innocence not a proof
thereof. It is one thing to say that the
accused is presumed to be innocent in
order to place on the prosecution the
burden of proving beyond reasonable
doubt that the accused is guilty. It is quite
another thing to say that he is innocent
and if he is convicted that he has been
"unjustly convicted." As this Court held in
a case:
Though we are acquitting the appellant for
the crime of rape with homicide, we
emphasize that we are not ruling that he is
innocent or blameless. It is only the
constitutional presumption of innocence
and the failure of the prosecution to build
an airtight case for conviction which
saved him, not that the facts of unlawful
conduct do not exist. 5
To say then that an accused has been
"unjustly convicted" has to do with the
manner of his conviction rather than with
his innocence. An accused may on appeal

be acquitted because he did not commit

the crime, but that does not necessarily
mean that he is entitled to compensation
for having been the victim of an "unjust
conviction." If his conviction was due to
an error in the appreciation of the
evidence the conviction while erroneous is
not unjust. That is why it is not, on the
other hand, correct to say as does
respondent, that under the law liability for
compensation depends entirely on the
innocence of the accused.
The phrase "unjustly convicted" has the
same meaning as "knowingly rendering an
unjust judgment" in art. 204 of the
Revised Penal Code. What this Court held
in In re Rafael C. Climaco 6 applies:
In order that a judge may be held liable
for knowingly rendering an unjust
judgment, it must be shown beyond doubt
that the judgment is unjust as it is
contrary to law or is not supported by the
evidence, and the same was made with
conscious and deliberate intent to do an
injustice . . . .
To hold a judge liable for the rendition of
manifestly unjust judgment by reason of
inexcusable negligence or ignorance, it
must be shown, according to Groizard,
that although he has acted without malice,
he failed to observe in the performance of
his duty, that diligence, prudence and care
which the law is entitled to exact in the
rendering of any public service.
Negligence and ignorance are inexcusable
if they imply a manifest injustice which
cannot be explained by a reasonable
interpretation. Inexcusable mistake only
exists in the legal concept when it implies
a manifest injustice, that is to say, such
injustice which cannot be explained by a
reasonable interpretation, even though
there is a misunderstanding or error of the

law applied, yet in the contrary it results,

logically and reasonably, and in a very
clear and indisputable manner, in the
notorious violation of the legal precept.
Indeed, sec. 3(a) does not refer solely to
an unjust conviction as a result of which
the accused is unjustly imprisoned, but, in
addition, to an unjust accusation. The
accused must have been "unjustly
accused, in consequence of which he is
unjustly convicted and then imprisoned. It
is important to note this because if from
its inception the prosecution of the
accused has been wrongful, his conviction
by the court is, in all probability, also
wrongful. Conversely, if the prosecution is
not malicious any conviction even though
based on less than the required quantum
of proof in criminal cases may be
erroneous but not necessarily unjust.
The reason is that under Rule 112, sec. 4,
the question for the prosecutor in filing a
case in court is not whether the accused is
guilty beyond reasonable doubt but only
whether "there is reasonable ground to
believe that a crime has been committed
and the accused is probably guilty
thereof." Hence, an accusation which is
based on "probable guilt" is not an unjust
accusation and a conviction based on such
degree of proof is not necessarily an
unjust judgment but only an erroneous
one. The remedy for such error is appeal.
In the case at bar there is absolutely no
evidence to show that petitioner's
conviction by the trial court was wrongful
or that it was the product of malice or
gross ignorance or gross negligence. To
the contrary, the court had reason to
believe that petitioner and his co-accused
were in league, because petitioner is the
father-in-law of Wilfredo Balderrama and
it was petitioner who bore the victim a

grudge because of a land dispute. Not only

that. Petitioner and his coaccused arrived
together in the hut of the victims and
forced their way into it.
The Court of Appeals ruled there was no
conspiracy only because there was no
proof that he did or say anything on the
occasion. Said the appellate court.
Both eyewitness testimonies fail to show
the appellant Felicito Basbacio to have
committed any act at all. Both fail to show
Felicito Basbacio as having said anything
at all. Both fail to show Felicito Basbacio
as having committed anything in
furtherance of a conspiracy to commit the
crimes charged against the defendants. It
seems to be a frail and flimsy basis on
which to conclude that conspiracy existed
between actual killer Wilfredo Balderrama
and Felicito Basbacio to commit murder
and two frustrated murders on that night
of June 26, 1988. It may be asked: where
was the coming together of the two
defendants to an agreement to commit the
crimes of murder and frustrated murder on
two counts? Where was Basbacio's
contribution to the commission of the said
crimes? Basbacio was as the record
shows nothing but part of the dark
shadows of that night. . . .
One may take issue with this ruling
because precisely conspiracy may be
shown by concert of action and other
circumstances. Why was petitioner with
his son-in-law? Why did they apparently
flee together? And what about the fact that
there was bad blood between petitioner
and the victim Federico Boyon? These
questions may no longer be passed upon
in view of the acquittal of petitioner but
they are relevant in evaluating his claim
that he had been unjustly accused,
convicted and imprisoned before he was

released because of his acquittal on

appeal. We hold that in view of these
circumstances respondent Secretary of
Justice and the Board of Claims did not
commit a grave abuse of its discretion in
disallowing
petitioner's
claim
for
compensation under Rep. Act No. 7309.
WHEREFORE,
the
petition
is
DISMISSED.
SO ORDERED.
Narvasa, C.J., Padilla, Bidin, Regalado,
Davide, Jr., Romero, Bellosillo, Melo,
Quiason, Puno, Vitug and Kapunan, JJ.,
concur.
Feliciano, J., is on leave.
# Footnotes
1 The statute in pertinent parts provide:
Sec. 3. Who may File Claims. The
following
may
file
claims
for
compensation before the Board:
a) any person who was unjustly accused,
convicted, imprisoned but subsequently
released by virtue of a judgment of
acquittal;
b) any person who was unjustly detained
and released without being charged;
c) any victim of arbitrary or illegal
detention by the authorities as defined in
the Revised Penal Code under a final
judgment of the court; and
d) any person who is a victim of violent
crimes. For purposes of this Act, violent
crimes shall include rape and shall
likewise refer to offenses committed with
malice which resulted in death or serious
physical and/or psychological injuries,
permanent incapacity or disability,
insanity, abortion, serious trauma, or
committed with torture, cruelty or

barbarity.
Sec. 4. Award Ceiling. For victims of
unjust imprisonment or detention, the
compensation shall be based on the
number of months of imprisonment or
detention and every fraction thereof shall
be considered one month: Provided,
however, That in no case shall such
compensation exceed One thousand pesos
(P1,000.00) per month.
In all other cases, the maximum amount
for which the Board may approve a claim
shall not exceed Ten thousand pesos
(P10,000.00) or the amount necessary to
reimburse the claimant the expenses
incurred for hospitalization, medical
treatment, loss of wage, loss of support or
other expenses directly related to the
injury, whichever is lower. This is without
prejudice to the right of the claimant to
seek other remedies under existing laws.
2 The Civil Code provides in Art. 29:
"When the accused in a criminal
prosecution is acquitted on the ground that
his guilt has not been proved beyond
reasonable doubt, a civil action for
damages for the same act or omission may
be instituted. Such action requires only a
preponderance of evidence. Upon motion
of the defendant, the court may require the
plaintiff to file a bond to answer for
damages in case the complaint should be
found to be malicious.
"If in a criminal case the judgment of
acquittal is based upon reasonable doubt,
the court shall so declare. In the absence
of any declaration to that effect, it may be
inferred from the text of the decision
whether or not the acquittal is due to that
ground."

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 109835 November 22, 1993
JMM PROMOTIONS &
MANAGEMENT, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS
COMMISSION and ULPIANO L. DE

LOS SANTOS, respondent.

Don P. Porciuncula for petitioner.
Eulogio Nones, Jr. for private respondent.
CRUZ, J.:
The sole issue submitted in this case is the
validity of the order of respondent
National Labor Relations Commission
dated October 30, 1992, dismissing the
petitioner's appeal from a decision of the
Philippine
Overseas
Employment
Administration on the ground of failure to
post the required appeal bond. 1
The respondent cited the second
paragraph of Article 223 of the Labor
Code as amended, providing that:
In the case of a judgment involving a
monetary award, an appeal by the
employer may be perfected only upon the
posting of a cash or surety bond issued by
a reputable bonding company duly
accredited by the Commission in an
amount equivalent to the monetary award
in the judgment appealed from and Rule
VI, Section 6 of the new Rules of
Procedure of the NLRC, as amended,
reading as follows:
Sec. 6. Bond In case the decision of a
Labor Arbiter involves a monetary award,
an appeal by the employer shall be
perfected only upon the posting of a cash
or surety bond issued by a reputable
bonding company duly accredited by the
Commission or the Supreme Court in an
amount equivalent to the monetary award.
The petitioner contends that the NLRC
committed grave abuse of discretion in
applying these rules to decisions rendered
by the POEA. It insists that the appeal
bond is not necessary in the case of
licensed
recruiters
for
overseas

employment because they are already

required under Section 4, Rule II, Book II
of the POEA Rules not only to pay a
license fee of P30,000 but also to post a
cash bond of P100,000 and a surety bond
of P50,000, thus:
Upon approval of the application, the
applicant shall pay a license fee of
P30,000. It shall also post a cash bond of
P100,000 and surety bond of P50,000
from a bonding company acceptable to the
Administration and duly accredited by the
Insurance Commission. The bonds shall
answer for all valid and legal claims
arising from violations of the conditions
for the grant and use of the license, and/or
accreditation
and
contracts
of
employment. The bonds shall likewise
guarantee compliance with the provisions
of the Code and its implementing rules
and regulations relating to recruitment
and placement, the Rules of the
Administration and relevant issuances of
the Department and all liabilities which
the Administration may impose. The
surety bonds shall include the condition
that the notice to the principal is notice to
the surety and that any judgment against
the principal in connection with matters
falling under POEA's jurisdiction shall be
binding and conclusive on the surety. The
surety bonds shall be co-terminus with the
validity period of license. (Emphasis
supplied)
In addition, the petitioner claims it has
placed in escrow the sum of P200,000
with the Philippine National Bank in
compliance with Section 17, Rule II, Book
II of the same Rule, "to primarily answer
for valid and legal claims of recruited
workers as a result of recruitment
violations or money claims."
Required to comment, the Solicitor
General sustains the appeal bond

requirement but suggest that the rules

cited by the NLRC are applicable only to
decisions of the Labor Arbiters and not of
the POEA. Appeals from decisions of the
POEA, he says, are governed by the
following provisions of Rule V, Book VII
of the POEA Rules:
Sec. 5. Requisites for Perfection of
Appeal. The appeal shall be filed within
the reglementary period as provided in
Section 1 of this Rule; shall be under oath
with proof of payment of the required
appeal fee and the posting of a cash or
surety bond as provided in Section 6 of
this Rule; shall be accompanied by a
memorandum of appeal which shall state
the grounds relied upon and the arguments
in support thereof; the relief prayed for;
and a statement of the date when the
appellant received the appealed decision
and/or award and proof of service on the
other party of such appeal.
A mere notice of appeal without
complying with the other requisites
aforestated shall not stop the running of
the period for perfecting an appeal.
Sec. 6. Bond. In case the decision of the
Administration involves a monetary
award, an appeal by the employer shall be
perfected only upon the posting of a cash
or surety bond issued by a reputable
bonding company duly accredited by the
Commission in an amount equivalent to
the monetary award. (Emphasis supplied)
The question is, having posted the total
bond of P150,000 and placed in escrow
the amount of P200,000 as required by the
POEA Rules, was the petitioner still
required to post an appeal bond to perfect
its appeal from a decision of the POEA to
the NLRC?

It was.
The POEA Rules are clear. A reading
thereof readily shows that in addition to
the cash and surety bonds and the escrow
money, an appeal bond in an amount
equivalent to the monetary award is
required to perfect an appeal from a
decision of the POEA. Obviously, the
appeal bond is intended to further insure
the payment of the monetary award in
favor of the employee if it is eventually
affirmed on appeal to the NLRC.
It is true that the cash and surety bonds
and the money placed in escrow are
supposed to guarantee the payment of all
valid and legal claims against the
employer, but these claims are not limited
to monetary awards to employees whose
contracts of employment have been
violated. The POEA can go against these
bonds also for violations by the recruiter
of the conditions of its license, the
provisions of the Labor Code and its
implementing
rules,
E.O.
247
(reorganizing POEA) and the POEA
Rules, as well as the settlement of other
liabilities the recruiter may incur.
As for the escrow agreement, it was
presumably intended to provide for a
standing fund, as it were, to be used only
as a last resort and not to be reduced with
the enforcement against it of every claim
of recruited workers that may be adjudged
against the employer. This amount may
not even be enough to cover such claims
and, even if it could initially, may
eventually be exhausted after satisfying
other subsequent claims.
As it happens, the decision sought to be
appealed grants a monetary award of
about P170,000 to the dismissed
employee, the herein private respondent.

The standby guarantees required by the

POEA Rules would be depleted if this
award were to be enforced not against the
appeal bond but against the bonds and the
escrow money, making them inadequate
for the satisfaction of the other obligations
the recruiter may incur.
Indeed, it is possible for the monetary
award in favor of the employee to exceed
the amount of P350,000, which is the sum
of the bonds and escrow money required
of the recruiter.
It is true that these standby guarantees are
not imposed on local employers, as the
petitioner observes, but there is a simple
explanation for this distinction. Overseas
recruiters are subject to more stringent
requirement because of the special risks to
which our workers abroad are subjected
by their foreign employers, against whom
there is usually no direct or effective
recourse. The overseas recruiter is
solidarily liable with a foreign employer.
The bonds and the escrow money are
intended to insure more care on the part of
the local agent in its choice of the foreign
principal to whom our overseas workers
are to be sent.
It is a principle of legal hermeneutics that
in interpreting a statute (or a set of rules as
in this case), care should be taken that
every part thereof be given effect, on the
theory that it was enacted as an integrated
measure and not as a hodge-podge of
conflicting provisions. Ut res magis valeat
quam pereat. 2 Under the petitioner's
interpretation, the appeal bond required by
Section 6 of the aforementioned POEA
Rule should be disregarded because of the
earlier bonds and escrow money it has
posted. The petitioner would in effect
nullify Section 6 as a superfluity but we
do not see any such redundancy; on the

contrary, we find that Section 6

complements Section 4 and Section 17.
The rule is that a construction that would
render a provision inoperative should be
avoided; instead, apparently inconsistent
provisions should be reconciled whenever
possible as parts of a coordinated and
harmonious whole.
Accordingly, we hold that in addition to
the monetary obligations of the overseas
recruiter prescribed in Section 4, Rule II,
Book II of the POEA Rules and the
escrow agreement under Section 17 of the
same Rule, it is necessary to post the
appeal bond required under Section 6,
Rule V, Book VII of the POEA Rules, as a
condition for perfecting an appeal from a
decision of the POEA.
Every intendment of the law must be
interpreted in favor of the working class,
conformably to the mandate of the
Constitution. By sustaining rather than
annulling the appeal bond as a further
protection to the claimant employee, this
Court affirms once again its commitment
to the interest of labor.
WHEREFORE,
the
petition
is
DISMISSED, with costs against the
petitioner. It is so ordered.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 75222 July 18, 1991
RADIOLA-TOSHIBA PHILIPPINES,
INC., through its assignee-in-insolvency
VICENTE J. CUNA, petitioner,
vs.
THE INTERMEDIATE APPELLATE
COURT, HON. LEONARDO I. CRUZ,
as Judge of the Regional Trial Court of
Angeles City, Branch No. LVI, EMILIO
C. PATINO, as assignee-in-insolvency
of CARLOS and TERESITA
GATMAYTAN, SHERIFF OF
ANGELES CITY, REGISTER OF
DEEDS OF ANGELES CITY, SANYO
MARKETING CORPORATION, S &
T ENTERPRISES INC.,
REFRIGERATION INDUSTRIES
INC., and DELTA MOTOR
CORPORATION, respondents.
Quisumbing, Torres & Evangelista for

petitioner.
Procopio S. Beltran, Jr. for private
respondents.
BIDIN, J.:p
This is a petition for certiorari of the
March 31, 1986 Decision of the then
Intermediate Appellate Court * in A.CG.R. SP No. 04160 entitled "RadiolaToshiba Philippines, Inc. vs. Hon.
Leonardo I. Cruz, et al." denying the
petition for certiorari and mandamus; and
its Resolution of July 1, 1986 denying the
motion for reconsideration.
The antecedent facts of this case, as found
by the then Intermediate Appellate Court,
are as follows:
On July 2, 1980, three creditors filed a
petition for the involuntary insolvency of
Carlos
Gatmaytan
and
Teresita
Gatmaytan, the private respondents
herein, the case docketed as Special
Proceeding No. 1548 of the then Court of
First Instance (now Regional Trial Court)
of Pampanga and Angeles City.
On July 9, 1980, the respondent court
issued an order taking cognizance of the
said petition and stating inter alia that:
. . . the Court forbids the payment of any
debts, and the delivery of any property
owing and belonging to said respondentsdebtors from other persons, or, to any
other persons for the use and benefit of the
same respondents-debtors and/or the
transfer of any property by and for the
said respondents-debtors to another, upon
petitioners' putting up a bond by way of
certified and reputable sureties. (Annex 1,
Comment).
Counsel for the petitioners-creditors
informed respondent sheriff Angeles City

of the aforesaid order (Annex 2, Ibid) and

on March 26, 1981, also communicated
with counsel for the petitioner herein
regarding same order, apprising the latter
that "the personal and real property which
have been levied upon and/or attached
should be preserved till the final
determination
of
the
petition
aforementioned." (Annex 3, Ibid).
On April 12, 1983, petitioners-creditors
filed second urgent motion for issuance of
insolvency order and resolution of the
case, alleging among other things, that in
November, 1982, they filed an urgent
motion to issue insolvency order; on
December 2, 1982, they presented a
motion to prohibit the city sheriff of
Angeles City from disposing the personal
and real properties of the insolvent
debtors, Carlos Gatmaytan and Teresita
Gatmaytan; on January 18, 1983, they
(sic) appealed in the Bulletin Today issue
of even date a news item to the effect that
Radiola-Toshiba Phil. Inc. has already
shut down its factory, sometime in March
1983, through their representative, they
caused to be investigated the real
properties in the names of Carlos
Gatmaytan and Teresita Gatmaytan and
they were surprised to find out that some
of the aforesaid properties were already
transferred to Radiola-Toshiba Phil. Inc.;
and that in view of such development, it is
their submission that without an
insolvency order and a resolution of the
case which was ripe for resolution as early
as March 3, 1982, the rights and interest
of petitioners-creditors would be injured
and jeopardized. (Annex "C").
On April 15, 1983, petitioner filed an
opposition to the said motion vis-a-vis the
prayer that the insolvency order (which
has not been rendered yet by the court) be
annotated on the transfer certificates of

title already issued in its name (Annex

"D").
On April 22, 1983, judgment was rendered
declaring the insolvency of respondentsdebtors Carlos Gatmaytan and Teresita
Gatmaytan.
On April 28, 1983, petitioner filed a
supplemental opposition to the same
second urgent motion and motion to direct
respondent sheriff to issue a final
certificate of sale for the properties
covered by TCT Nos. 18905 and 40430 in
its favor (Annex "E").
On February 3, 1984, acting upon
petitioner's
motion
claiming
that
ownership of certain real properties of the
insolvents had passed to it by virtue of
foreclosure proceedings conducted in
Civil Case No. 35946 of the former Court
of First Instance of Rizal, Branch II,
Pasig, Metro Manila, which properties
were not redeemed within the period of
redemption, respondent court issued an
order disposing, thus:
WHEREFORE, the Court hereby,
confirms the election of Mr. Emilio C.
Patino, as assignee of all the registered
claimants in this case, and, in consequence
thereof, the said assignee is hereby
directed to post a bond in the amount of
P30,000.00 and to take his oath thereafter
so as to be able to perform his duties and
discharge his functions, as such.
The Court, likewise, sets the meeting of
all the creditors with the attendance, of
course, of the assignee, on March 9, 1984,
at 8:30., as by that time the proposals,
which the respective representatives of the
parties-claimants desire to clear with their
principals, shall have already been
reported.

The assignee shall see to it that the

properties of the insolvents which are now
in the actual or constructive custody and
management of the receiver previously
appointed by the Court on petitioners' and
claimants' proposals be placed under this
actual or constructive custody and
management, such as he is able to do so,
as the Court hereby dissolves the
receivership previously authorized, it
having become a superfluity. (Annex "F").
On May 18, 1984, the Regional Trial
Court, Branch CLII, Pasig, Metro Manila,
in Civil Case No. 35946, issued an order
directing respondent Sheriff of Angeles
City, or whoever is acting in his behalf, to
issue within seven (7) days from notice
thereof a final deed of sale over the two
(2) parcels of land covered by Transfer
Certificates of Titles Nos. 18905 and
40430 in favor of petitioner. (Annex "G").
In said Civil Case No. 35946, a case for
collection of sum of money covering the
proceeds of television sets and other
appliances, the then Court of First
Instance of Rizal, Branch II, Pasig, Metro
Manila, issued a writ of preliminary
attachment on February 15, 1980 upon
application of the petitioner, as plaintiff,
which put up a bond of P350,000.00. On
March 4, 1980, 3:00 P.M., levy on
attachment was done in favor of petitioner
on the real properties registered in the
names of spouses Carlos Gatmaytan and
Teresita Gatmaytan under TCT Nos.
18905 and 40430 of the Registry of Deeds
of Angeles City, per Entry No. 7216 on
said titles. (Annex "A" and "B").
On December 10, 1980, a decision was
rendered in favor of petitioner, ordering
private respondents and their co-defendant
Peoples Appliance Center, Inc. to pay
petitioner, jointly and severally, the sum of
P721,825.91 plus interest thereon of 14%

per annum from October 12, 1979 until

fully paid; P20,000.00, for and attorney's
fees; and the costs of suit (Annex "5",
Comment). After the said decision in the
aforementioned Civil Case No. 35946
became final and executory, a writ of
execution for the satisfaction thereof
issued on March 18, 1981; and on May 4,
1981, respondent sheriff of Angeles City
sold at auction sale the attached properties
covered by TCT Nos. 18905 and 40430, to
petitioner as the highest bidder, and the
certificate of sale was accordingly issued
in its favor.
On September 21, 1982, the court ordered
the consolidation of ownership of
petitioner over said properties; but
respondent sheriff of Angeles City refused
to issue a final certificate of sale in favor
of petitioner.
On May 30, 1984, petitioners-creditors
interposed their opposition, stating among
other things, that subject motion is
improper and premature because it treats
of matters foreign to the insolvency
proceedings; and premature, for the reason
that the properties covered by TCT Nos.
18905 and 40430-Angeles City were
brought to the jurisdiction of the
insolvency court for the determination of
the assets of the insolvents available for
distribution
to
the
approved
credits/liabilities of the insolvents.
Petitioners-creditors theorized that the
insolvency court is devoid of jurisdiction
to grant the motion referring to matters
involved in a case pending before a
coordinate court in another jurisdiction
(Annex "l").
Prior thereto or on July 13, 1984, to be
precise, respondent court came out with
its assailed extended order with the
following decretal portion:

WHEREFORE, and also for the reason

stated in the aforequoted order issued in
pursuance of a similar motion of the
movant, the Court denies, as it is hereby
denied the motion of Radiola-Toshiba,
dated May 28, 1984 and directs the latter
to participate in the supposed meeting of
all the creditors/claimants presided by the
duly elected assignee. (Annex "J").
On September 8, 1984, herein petitioner
Radiola-Toshiba Philippines, Inc. (RTPI,
for short) filed a petition forcertiorari and
mandamus with respondent Intermediate
Appellate Court.
The then Intermediate Appellate Court, in
a Decision promulgated on March 31,
1986, denied petitioner's aforesaid
petition. On April 19, 1986, petitioner
filed a motion for reconsideration, but the
same was denied in a Resolution dated
July 1, 1986.
Hence, the instant petition.
petitioner raised two issues

Herein

1. WHETHER OR NOT CERTIORARI IS

A REMEDY DESIGNATED FOR THE
CORRECTION OF ERRORS OF
JURISDICTION ONLY; and
2.
2. WHETHER OR NOT THE REFUSAL
OF THE COURTS TO ENFORCE THE
LIEN OF PETITIONER ARISING
FROM A LEVY OF ATTACHMENT
NOT MADE WITHIN ONE MONTH
NEXT
PRECEDING
THE
COMMENCEMENT
OF
THE
INSOLVENCY
PROCEEDING
IS
GRAVE ABUSE OF DISCRETION.
3.
The main issue in this case is whether or
not the levy on attachment in favor of the
petitioner is dissolved by the insolvency

proceedings against respondent spouses

commenced four months after said
attachment.
On this issue, Section 32 of the Insolvency
Law (Act No. 1956, as amended),
provides:
Sec. 32 As soon as an assignee is
elected or appointed and qualified, the
clerk of the court shall, by an instrument
under his hand and seal of the court,
assign and convey to the assignee all the
real and personal property, estate, and
effects of the debtor with all his deeds,
books, and papers relating thereto, and
such assignment shall relate back to the
commencement of the proceedings in
insolvency, and shall relate back to the
acts upon the adjudication was founded,
and by operation of law shall vest the title
to all such property, estate, and effects in
the assignee, although the same is then
attached on mesne process, as the property
of the debtor. Such assignment shall
operate to vest in the assignee all of the
estate of the insolvent debtor not exempt
by law from execution. It shall dissolve
any attachment levied within one month
next preceding the commencement of the
insolvency proceedings and vacate and
set aside any judgment entered in any
action commenced within thirty days
immediately prior to the commencement
of insolvency proceedings and shall set
aside any judgment entered by default or
consent of the debtor within thirty days
immediately prior to the commencement
of the insolvency proceedings. (Emphasis
supplied)
Relative thereto, the findings of the then
Intermediate
Appellate
Court
are
undisputed that the levy on attachment
against the subject properties of the
Gatmaytans, issued by the then Court of
First Instance of Pasig in Civil Case No.

35946, was on March 4, 1980 while the

insolvency proceeding in the then Court of
First Instance of Angeles City, Special
Proceeding No. 1548, was commenced
only on July 2, 1980, or more than four
(4) months after the issuance of the said
attachment. Under the circumstances,
petitioner contends that its lien on the
subject properties overrode the insolvency
proceeding and was not dissolved thereby.
Private respondents, on the other hand,
relying on Section 79 of the said law,
which reads:
Sec. 79. When an attachment has been
made and is not dissolved before the
commencement of proceedings in
insolvency, or is dissolved by an
undertaking given by the defendant, if the
claim upon which the attachment suit was
commenced is proved against the estate of
the debtor, the plaintiff may prove the
legal costs and disbursements of the suit,
and of the keeping of the property, and the
amount thereof shall be a preferred debt.
and the fact that petitioner and its counsel
have full knowledge of the proceedings in
the insolvent case, argue that the
subsequent Certificate of Sale on August
3, 1981, issued in favor of petitioner over
the subject properties, was issued in bad
faith, in violation of the law and is not
equitable for the creditors of the insolvent
debtors; and pursuant to the above quoted
Section 79, petitioner should not be
entitled to the transfer of the subject
properties in its name.
Petitioner's contention is impressed with
merit. The provision of the above-quoted
Section 32, of the Insolvency Law is very
clear that attachments dissolved are
those levied within one (1) month next
preceding the commencement of the

insolvency proceedings and judgments

vacated and set aside are judgments
entered in any action, including judgment
entered by default or consent of the
debtor, where the action was filed within
thirty (30) days immediately prior to the
commencement of the insolvency
proceedings. In short, there is a cut off
period one (1) month in attachment
cases and thirty (30) days in judgments
entered in actions commenced prior to the
insolvency proceedings. Section 79, on
the other hand, relied upon by private
respondents, provides for the right of the
plaintiff if the attachment is not dissolved
before the commencement of proceedings
in insolvency, or is dissolved by an
undertaking given by the defendant, if the
claim upon which the attachment suit was
commenced is proved against the estate of
the debtor. Therefore, there is no conflict
between the two provisions.
But even granting that such conflict exists,
it may be stated that in construing a
statute, courts should adopt a construction
that will give effect to every part of a
statute, if at all possible. This rule is
expressed in the maxim, ut maqis valeat
quam pereat or that construction is to be
sought which gives effect to the whole of
the statute its every word. Hence,
where a statute is susceptible of more than
one interpretation, the court should adopt
such
reasonable
and
beneficial
construction as will render the provision
thereof operative and effective and
harmonious with each other (Javellana vs.
Tayo, 6 SCRA 1042 [1962]; Statutory
Construction by Ruben E. Agpalo, p. 182).

Insolvency Law. In the case of Velayo vs.

Shell Co. of the Philippines (100 Phil.
187, [1956]), this Court ruled that
Sections 32 and 70 contemplate only acts
and transactions occurring within 30 days
prior to the commencement of the
proceedings
in
insolvency
and,
consequently, all other acts outside of the
30-day period cannot possibly be
considered as coming within the orbit of
their operation.
Finally, petitioner correctly argued that the
properties in question were never placed
under the jurisdiction of respondent
insolvency court so as to be made
available for the payment of claim filed
against the Gatmaytans in the insolvency
proceedings.
Hence, the denial by respondent
insolvency court to give due course to the
attachment and execution of Civil Case
No. 35946 of the CFI of Rizal constitutes
a freezing of the disposition of subject
properties by the former which were not
within its jurisdiction; undeniably, a grave
abuse of discretion amounting to want of
jurisdiction, correctable by certiorari.
WHEREFORE, the March 31, 1986
decision of the then Intermediate
Appellate Court is hereby Reversed and
SET ASIDE. The attachment and
execution sale in Civil Case No. 35946 of
the former CFI of Rizal are given due
course and petitioner's ownership of
subject properties covered by TCT Nos.
18905 and 40430 is ordered consolidated.
SO ORDERED.

Neither can the sheriff's sale in execution

of the judgment in favor of the petitioner
be considered as a fraudulent transfer or
preference by the insolvent debtors, which
constitute a violation of Sec. 70 of the

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-39419 April 12, 1982
MAPALAD AISPORNA, petitioner,
vs.
THE COURT OF APPEALS and THE
PEOPLE OF THE PHILIPPINES,
respondents.

That on or before the 21st day of June,

1969, in the City of Cabanatuan, Republic
of the Philippines, and within the
jurisdiction of this Honorable Court, the
above-named accused, did then and there,
wilfully, unlawfully and feloniously act as
agent in the solicitation or procurement of
an application for insurance by soliciting
therefor the application of one Eugenio S.
Isidro, for and in behalf of Perla
Compania de Seguros, Inc., a duly
organized insurance company, registered
under the laws of the Republic of the
Philippines, resulting in the issuance of a
Broad Personal Accident Policy No. 28PIRSA 0001 in the amount not exceeding
FIVE THOUSAND PESOS (P5,000.00)
dated June 21, 1969, without said accused
having first secured a certificate of
authority to act as such agent from the
office of the Insurance Commissioner,
Republic of the Philippines.

DE CASTRO, J.:
In this petition for certiorari, petitioneraccused Aisporna seeks the reversal of the
decision dated August 14, 19741 in CAG.R. No. 13243-CR entitled "People of
the Philippines, plaintiff-appellee, vs.
Mapalad Aisporna, defendant-appellant"
of respondent Court of Appeals affirming
the judgment of the City Court of
Cabanatuan 2 rendered on August 2, 1971
which found the petitioner guilty for
having violated Section 189 of the
Insurance Act (Act No. 2427, as amended)
and sentenced her to pay a fine of P500.00
with subsidiary imprisonment in case of
insolvency, and to pay the costs.
Petitioner Aisporna was charged in the
City Court of Cabanatuan for violation of
Section 189 of the Insurance Act on
November 21, 1970 in an information 3
which reads as follows:

CONTRARY TO LAW.
The facts, 4 as found by the respondent
Court of Appeals are quoted hereunder:
IT RESULTING: That there is no debate
that since 7 March, 1969 and as of 21
June, 1969, appellant's husband, Rodolfo
S. Aisporna was duly licensed by
Insurance Commission as agent to Perla
Compania de Seguros, with license to
expire on 30 June, 1970, Exh. C; on that
date, at Cabanatuan City, Personal
Accident Policy, Exh. D was issued by
Perla thru its author representative,
Rodolfo S. Aisporna, for a period of
twelve (12) months with beneficiary as
Ana M. Isidro, and for P5,000.00;
apparently, insured died by violence
during lifetime of policy, and for reasons
not explained in record, present
information was filed by Fiscal, with
assistance of private prosecutor, charging
wife of Rodolfo with violation of Sec. 189

of Insurance Law for having, wilfully,

unlawfully, and feloniously acted, "as
agent in the solicitation for insurance by
soliciting therefore the application of one
Eugenio S. Isidro for and in behalf of
Perla Compaa de Seguros, ... without
said accused having first secured a
certificate of authority to act as such agent
from the office of the Insurance
Commission,
Republic
of
the
Philippines."
and in the trial, People presented evidence
that
was
hardly
disputed,
that
aforementioned policy was issued with
active participation of appellant wife of
Rodolfo, against which appellant in her
defense sought to show that being the wife
of true agent, Rodolfo, she naturally
helped him in his work, as clerk, and that
policy was merely a renewal and was
issued because Isidro had called by
telephone to renew, and at that time, her
husband, Rodolfo, was absent and so she
left a note on top of her husband's desk to
renew ...
Consequently, the trial court found herein
petitioner guilty as charged. On appeal,
the trial court's decision was affirmed by
the respondent appellate court finding the
petitioner guilty of a violation of the first
paragraph of Section 189 of the Insurance
Act. Hence, this present recourse was filed
on October 22, 1974. 5
In its resolution of October 28, 1974, 6 this
Court resolved, without giving due course
to this instant petition, to require the
respondent to comment on the aforesaid
petition. In the comment 7 filed on
December 20, 1974, the respondent,
represented by the Office of the Solicitor
General, submitted that petitioner may not
be considered as having violated Section
189 of the Insurance Act. 8 On April 3,
1975, petitioner submitted his Brief 9

while the Solicitor General, on behalf of

the respondent, filed a manifestation 10 in
lieu of a Brief on May 3, 1975 reiterating
his stand that the petitioner has not
violated Section 189 of the Insurance Act.
In seeking reversal of the judgment of
conviction,
petitioner
assigns
the
11
following errors allegedly committed by
the appellate court:
1. THE RESPONDENT COURT OF
APPEALS ERRED IN FINDING THAT
RECEIPT OF COMPENSATION IS NOT
AN ESSENTIAL ELEMENT OF THE
CRIME DEFINED BY THE FIRST
PARAGRAPH OF SECTION 189 OF
THE INSURANCE ACT.
2. THE RESPONDENT COURT OF
APPEALS ERRED IN GIVING DUE
WEIGHT TO EXHIBITS F, F-1, TO F-17,
INCLUSIVE
SUFFICIENT
TO
ESTABLISH PETITIONER'S GUILT
BEYOND REASONABLE DOUBT.
3. THE RESPONDENT COURT OF
APPEALS
ERRED
IN
NOT
ACQUITTING HEREIN PETITIONER.
We find the petition meritorious.
The main issue raised is whether or not a
person can be convicted of having
violated the first paragraph of Section 189
of the Insurance Act without reference to
the second paragraph of the same section.
In other words, it is necessary to
determine whether or not the agent
mentioned in the first paragraph of the
aforesaid section is governed by the
definition of an insurance agent found on
its second paragraph.
The pertinent provision of Section 189 of
the Insurance Act reads as follows:

No insurance company doing business

within the Philippine Islands, nor any
agent thereof, shall pay any commission
or other compensation to any person for
services in obtaining new insurance,
unless such person shall have first
procured
from
the
Insurance
Commissioner a certificate of authority to
act as an agent of such company as
hereinafter provided. No person shall act
as agent, sub-agent, or broker in the
solicitation of procurement of applications
for insurance, or receive for services in
obtaining new insurance, any commission
or other compensation from any insurance
company doing business in the Philippine
Islands, or agent thereof, without first
procuring a certificate of authority so to
act from the Insurance Commissioner,
which must be renewed annually on the
first day of January, or within six months
thereafter. Such certificate shall be issued
by the Insurance Commissioner only upon
the written application of persons desiring
such authority, such application being
approved and countersigned by the
company such person desires to represent,
and shall be upon a form approved by the
Insurance Commissioner, giving such
information as he may require. The
Insurance Commissioner shall have the
right to refuse to issue or renew and to
revoke any such certificate in his
discretion. No such certificate shall be
valid, however, in any event after the first
day of July of the year following the
issuing of such certificate. Renewal
certificates may be issued upon the
application of the company.
Any person who for compensation solicits
or obtains insurance on behalf of any
insurance company, or transmits for a
person other than himself an application
for a policy of insurance to or from such

company or offers or assumes to act in the

negotiating of such insurance, shall be an
insurance agent within the intent of this
section, and shall thereby become liable to
all the duties, requirements, liabilities, and
penalties to which an agent of such
company is subject.
Any person or company violating the
provisions of this section shall be fined in
the sum of five hundred pesos. On the
conviction of any person acting as agent,
sub-agent, or broker, of the commission of
any offense connected with the business
of insurance, the Insurance Commissioner
shall immediately revoke the certificate of
authority issued to him and no such
certificate shall thereafter be issued to
such convicted person.
A careful perusal of the above-quoted
provision shows that the first paragraph
thereof prohibits a person from acting as
agent, sub-agent or broker in the
solicitation or procurement of applications
for insurance without first procuring a
certificate of authority so to act from the
Insurance Commissioner, while its second
paragraph defines who is an insurance
agent within the intent of this section and,
finally, the third paragraph thereof
prescribes the penalty to be imposed for
its violation.
The respondent appellate court ruled that
the petitioner is prosecuted not under the
second paragraph of Section 189 of the
aforesaid Act but under its first paragraph.
Thus ... it can no longer be denied that
it was appellant's most active endeavors
that resulted in issuance of policy to
Isidro, she was there and then acting as
agent, and received the pay thereof her
defense that she was only acting as helper
of her husband can no longer be sustained,
neither her point that she received no

compensation for issuance of the policy

because any person who for compensation
solicits or obtains insurance on behalf of
any insurance company or transmits for a
person other than himself an application
for a policy of insurance to or from such
company or offers or assumes to act in the
negotiating of such insurance, shall be an
insurance agent within the intent of this
section, and shall thereby become liable to
all the duties, requirements, liabilities, and
penalties, to which an agent of such
company is subject. paragraph 2, Sec. 189,
Insurance Law,
now it is true that information does not
even allege that she had obtained the
insurance, for compensation which is the
gist of the offense in Section 189 of the
Insurance Law in its 2nd paragraph, but
what appellant apparently overlooks is
that she is prosecuted not under the 2nd
but under the 1st paragraph of Sec. 189
wherein it is provided that, No person
shall act as agent, sub-agent, or broker, in
the solicitation or procurement of
applications for insurance, or receive for
services in obtaining new insurance any
commission or other compensation from
any insurance company doing business in
the Philippine Island, or agent thereof,
without first procuring a certificate of
authority to act from the insurance
commissioner, which must be renewed
annually on the first day of January, or
within six months thereafter.
therefore, there was no technical defect in
the wording of the charge, so that Errors 2
and 4 must be overruled. 12
From the above-mentioned ruling, the
respondent appellate court seems to imply
that the definition of an insurance agent
under the second paragraph of Section 189
is not applicable to the insurance agent
mentioned in the first paragraph.
Parenthetically, the respondent court

concludes that under the second paragraph

of Section 189, a person is an insurance
agent if he solicits and obtains an
insurance for compensation, but, in its
first paragraph, there is no necessity that a
person solicits an insurance for
compensation in order to be called an
insurance agent.
We find this to be a reversible error. As
correctly pointed out by the Solicitor
General, the definition of an insurance
agent as found in the second paragraph of
Section 189 is intended to define the word
"agent" mentioned in the first and second
paragraphs of the aforesaid section. More
significantly, in its second paragraph, it is
explicitly provided that the definition of
an insurance agent is within the intent of
Section 189. Hence Any person who
for compensation ... shall be an insurance
agent within the intent of this section, ...
Patently, the definition of an insurance
agent under the second paragraph holds
true with respect to the agent mentioned in
the other two paragraphs of the said
section. The second paragraph of Section
189 is a definition and interpretative
clause intended to qualify the term "agent"
mentioned in both the first and third
paragraphs of the aforesaid section.
Applying the definition of an insurance
agent in the second paragraph to the agent
mentioned in the first and second
paragraphs would give harmony to the
aforesaid three paragraphs of Section 189.
Legislative intent must be ascertained
from a consideration of the statute as a
whole. The particular words, clauses and
phrases should not be studied as detached
and isolated expressions, but the whole
and every part of the statute must be
considered in fixing the meaning of any of
its parts and in order to produce
harmonious whole. 13 A statute must be so

construed as to harmonize and give effect

to all its provisions whenever possible. 14
The meaning of the law, it must be borne
in mind, is not to be extracted from any
single part, portion or section or from
isolated words and phrases, clauses or
sentences but from a general consideration
or view of the act as a whole. 15 Every part
of the statute must be interpreted with
reference to the context. This means that
every part of the statute must be
considered together with the other parts,
and kept subservient to the general intent
of the whole enactment, not separately
and independently. 16 More importantly,
the doctrine of associated words (Noscitur
a Sociis) provides that where a particular
word or phrase in a statement is
ambiguous in itself or is equally
susceptible of various meanings, its true
meaning may be made clear and specific
by considering the company in which it is
found or with which it is associated. 17
Considering that the definition of an
insurance agent as found in the second
paragraph is also applicable to the agent
mentioned in the first paragraph, to
receive a compensation by the agent is an
essential element for a violation of the
first paragraph of the aforesaid section.
The appellate court has established
ultimately that the petitioner-accused did
not receive any compensation for the
issuance of the insurance policy of
Eugenio Isidro. Nevertheless, the accused
was convicted by the appellate court for,
according to the latter, the receipt of
compensation for issuing an insurance
policy is not an essential element for a
violation of the first paragraph of Section
189 of the Insurance Act.
We rule otherwise. Under the Texas Penal
Code 1911, Article 689, making it a
misdemeanor for any person for direct or
indirect compensation to solicit insurance

without a certificate of authority to act as

an insurance agent, an information, failing
to allege that the solicitor was to receive
compensation either directly or indirectly,
charges no offense. 18 In the case of Bolen
vs. Stake, 19 the provision of Section 3750,
Snyder's Compiled Laws of Oklahoma
1909 is intended to penalize persons only
who acted as insurance solicitors without
license, and while acting in such capacity
negotiated and concluded insurance
contracts for compensation. It must be
noted that the information, in the case at
bar, does not allege that the negotiation of
an insurance contracts by the accused with
Eugenio Isidro was one for compensation.
This allegation is essential, and having
been omitted, a conviction of the accused
could not be sustained. It is well-settled in
Our jurisprudence that to warrant
conviction, every element of the crime
must be alleged and proved. 20
After going over the records of this case,
We are fully convinced, as the Solicitor
General maintains, that accused did not
violate Section 189 of the Insurance Act.
WHEREFORE, the judgment appealed
from is reversed and the accused is
acquitted of the crime charged, with costs
de oficio.
SO ORDERED.